According to the institutional investor Mohamed El-Erian, a positive effect of low duty rates on the economy is very limited . Or it may disappear altogether unpleasant at confluence certain circumstances - for AMarkets materials.
Low rates will not affect the structural changes and not be able to mitigate global threats like BREXIT. Out of Britain from the EU can take years and will be followed by stagnation in the EU and UK economies. Prospects that US companies will be able to show good results in profit, far from optimistic despite the global slowdown.Most concerns around European and American banking segment.
The most obvious problem - the deterioration of quality of loan portfolios. Low rate debt imply another risk - the players will take too many loans, more than able to pay. History shows that the low interest rates and the flat yield curve dynamics almost always signals the approaching recession. But the current situation is very special.
Treasuries yield curve is controlled in real time what is happening in Europe rather than America itself. Even the Japanese economy has a very pronounced effect on the dynamics of US bonds. Exactly how and expectations of new rounds of monetary easing by Japan, Europe and the UK.