Straight Story: Nearing zero
The Federal Reserve has cut interest rates to a legendary new low. Is this good? Economics editor Chris Farrell tells Tess Vigeland the good that can come out of having a Federal interest rate at near-zero.
Economics editor Chris Farrell (American Public Media)
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From Washington, DC, 12/20/2008
Chris Farrell gave Tess Vigeland some of the worst advice I've heard recently when she asked where investors should put their money in this low-interest-rate environment and he said there weren't any good low-risk choices. The obvious answer is intermediate- or long-term AAA-rated tax-exempt bonds, currently with yields at historic highs over their taxable U.S. Treasury equivalents. Even pre-refunded tax-exempt municipals (backed by U.S. Treasuries in escrow) are yielding more than the Treasuries of comparable term. Chris, read the Bond Buyer and not just the WSJ!
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