[content_block id=1626]
Redrick Terry:
4 Your Money time now. We’re joined by David Nelson, CEO of NelsonCorp Wealth Management. David, welcome back.
David Nelson:
Thanks, Redrick. Appreciate it.
Redrick Terry:
Of course. We’re glad to have you as always. We’ve talked about in past segments about interest rates, yield curves, and related items. So, where does that segment of the financial world stand at this point.
David Nelson:
Well, it’s been a big big significant move that’s taken place as far as in the interest rate world. This is the 10 year bond that we’re looking at here. Interest rates have gone from 3.2% seven months ago to two in change as far as now. This is big. This is really good as far as if you’re borrowing. Not so good as far as if you’re a saver, but a 35%… Now, the question is not will it continue. The question is why has this happened.
David Nelson:
We’ve spoken about it as far as on prior programs, and our concern, it has been and continues to be as far as that this is, generally speaking, an indication that we might be going into recession. And stock markets fighting as far as to keep moving forward, bond market is going the other direction as far as interest rates going down. This is a very unusual position that we find ourself in. And again, I would be, if I were a betting person today, I would take this very seriously. This is, again, good news if you’re borrowing, bad news if you’re a saver.
Redrick Terry:
You mentioned the interest rates. They play a very important role, obviously, in financial markets. So, could you explain that a little bit more?
David Nelson:
Sure. So, probably the biggest item on the east is one, as far as for folks out there, is if you were a corporation and you needed to buy something new, some big equipment, what have you, you’re looking at interest rates as far as that have dropped significantly. So, the cost of borrowing has dropped dramatically. So, this is fantastic news as far as for those individuals. That does come into play as far as for business owners.
Redrick Terry:
So, what are other ways that this impacts people specifically?
David Nelson:
Savers, big big item. This is really damaging because we finally start seeing interest rates go up a little bit. Now, for borrowers, this is fantastic. If you haven’t refinanced in that last year or so, take a hard look at it. This particularly chart is showing the 30 year bond versus the 10 year bond, and we see a very common pattern here as far the dropping of a… A 30 year bond, you’re now right around 4%. 10 year bond, you’re around 2%. So, fantastic news. Again, big picture if you’re borrowing. Not so good news if you’re a saver. And again, you want to keep a close eye on it because this could be a real telling tale as far as what’s ahead as far as the economy is concerned. Generally speaking, this indicates a recession.
Redrick Terry:
All right, David. Thanks so much as always.
David Nelson:
Thank you, Redrick. Appreciate it.
Redrick Terry:
All right. Absolutely. And if you missed any of our discussion, we’ll make it available for you on our website, ourquadcities.com.
[content_block id=1539 slug=button-for-all-tv-and-radio]