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How Might the Looming Negative Rate Environment Affect Your Savings?

35 mins.
03 MARCH, 2021
tipos reales
ANALYSTS:
Leopoldo Torralba null
Ignacio de la Torre null
Global AER Global AER Personal
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There is increasing evidence that an almost unprecedented phenomenon of great relevance for economic players is in the offing: a protracted period of negative real interest rates. Real rates are the traditional nominal ones, minus inflation, and are used to analyse the increase or decrease of savings’ purchasing power, mainly in cash or low-risk fixed-income instruments. This is a crucial phenomenon with important implications for the decisions of individuals, companies and investors.
What are real rates and why is it so important to understand them well?
How do negative real rates affect savings?
What are the significant associated risks for savers and investors?
How can we protect ourselves?

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