The economy and 0 percent

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Let's talk economics,we have 0 percent interest rates in the US.

I have never understand economics,it's to absract, I like to read history a lot and I do well with more straight forward factual things,not absract things so much.

What does all this mean and what will 0 percent interest rates do for or against the economy.

It means the federal reserve won’t be charging interest on loans to either the government or large corporations/banks.

In theory that’s meant to make loans cheaper for all businesses & households and allow the gov to spend more without going bust. In theory.

The Prime Interest Rate in the US at the moment is 3.25%

There are some 15-year mortgages which carry a below-3% interest rate.

If I agree to lend you money- which would you prefer?

A) I charge you high interest.

B)I charge you low interest

c) That I charge you no interest at all.

Probably C.

If I offered C you would borrow more, and thus spend, or invest more. And that would help the economy by increasing demand. But it would only be good if the economy were in recession.Since the economy was doing ok such a move would seem to only feed inflation, but apparently they expect a recession caused by the virus scare. So that's to offset the anticipated reduction in demand for labor caused by the virus scare.

Or that's my theory.

Guardian says that the current US Federal interest rates are between 1% and 1.25% depending on whose taking out what type of loan with the Fed.

Although if that’s equal to or less than current statistically averaged inflation price appreciation* it might be presented as being effectively zero.

*I have issues with current media standards for the usage of economic terms

The "benchmark" rate is between 0% and 0.25%.

This was also done in 2008.

^ Is that the one for loans to government agencies?
Or commercial banks?

Probably both, actually.

The Fed is also buying $700 billion in various types of bonds.

Stocks are way down again.

I think the theory behind the zero percent interest rate is that you will borrow more on an interest free loan to boost the economy by you using said zero interest loan to invest more in other things like stocks or real estate or something.

Stocks went down 3,000 points.

This is putting a serious dent in my retirement plans

Once this thing is over, they'll come back up pretty rapidly.