ML-Implode News - Low, Negative Rates Sapping Growth, Retirement Prospects

... an ultra-easy monetary policy may be part of the reason we've been stuck with low growth. Witness Japan and Europe.. no one fully understands how all the moving parts influence each other. Years of ZIRP did help businesses and consumers reduce their debt burdens. ZIRP and multiple rounds of QE have also done wonders for stock prices... but not much for the kind of business expansion that creates jobs and GDP growth.
If year upon year of ultra-low rates were enough to create an economic boom, Japan would be the world's strongest economy right now. It obviously isn't--which says something about ZIRP's efficacy as a stimulus tool.

If ZIRP is bad, NIRP will be far worse for retirement planning. Bond-return assumptions will have to be even lower and potentially below zero. This situation would wreak havoc on every pension fund--but that's not even the worst part... It doesn't require a great deal of head scratching to realize that a negative interest rate environment is going to bring overall bond yields down below 2%... That paltry yield will drop the blended portfolio rate to 1.2%.

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Low, Negative Rates Sapping Growth, Retirement Prospects