Easy Money Used For Company Repair
As the Fed continues to keep interest rates low more companies are borrowing money and going through with improvements that they have been planning since prior to the financial crisis. Many companies are borrowing money to physically rebuild themselves since the interest rates are so low. Since interest rates are low companies are borrowing more and spending more, and a lot of the money being borrowed is going into other capital investments. The money that has been borrowed is not going to anything important funds. The low interest rates aim to improve the economy but it seems as if it has not been doing much since the unemployment rate is still high.
It seems that the Feds have been trying to push these low interest rates for a while, but little positive changes have been made. Instead of pushing out money and having it land in unhelpful places the Fed should slow down with the easy money policies. Large companies are benefitting from these low interest rates, but the everyday citizen sees little to no change.
Written by: Jessica Ho
Source: The Wall Street Journal