Savers complain when interest rates are low. Borrowers complain when they are high. Now rates are at historic lows (in nominal terms, before adjusting for inflation). A Financial Times editorial explains that these low interest rates are not the problem. They exist because markets expect “anaemic nominal economic growth, with both real expansion and inflation strikingly low, for decades ahead”. Raising interest rates will not provide the stimulus needed to change these expectations. Why? Because, as Keynes taught us, higher interest rates produce increased savings, with lower investment and consumer spending.
Negative short-term rates are not the problem. They are evidence of central banks