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Interest Rates and CEO Sentiment

This month the CEO Index analyzed interest rates and their effect on business. There has been a lot of talk lately about whether interest rates, which have been at historical lows, are infact too low. Low interest rates can have several effects. Primarily, they reduce the cost of holding cash, prompting more people to hold cash, more people to spend money, and more people to take out mortgages. Fewer foreign investors hold U.S. dollars compared with other currencies because the return rate is too low; this can lead to a depreciating dollars.

CEO responses suggested that the media and pundits may be placing undue attention on interest rates. A full 57% of our executives responded that the ...

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