Interest rates pose problems for structurers

Lacking direction

The future path of interest rates is uncertain

One of the more persistent effects of the global slump is that of low interest rates coupled with undesirably low inflation. Last year, inflation plummeted as low as -2% in the US after topping 5% the year before, and are now around 1%. Nominal and real interest rates are at 30-year lows as central banks across the developed world reduce their lending rates to record lows reaching 0-0.20% this year. There has been a lot of uncertainty surrounding the direction of fixed-income structured products

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