interest rates

interest rates
How was it possible that interest rates remain low worldwide for such a long period?

We had a long period of low interest rates with low inflation. Inflation was fairly stable during this period, with the exception of housing inflation (which is not included in the CPI data). Im concerned the period 1995-2007

Two reasons. First, the global economy has reduced significantly. Slow economic growth usually results in lower interest rates, because there is less demand for business credit. The demand pushes up prices (including the price of money), and the lack of demand drives prices down. Second, the central banks of major economic powers (in particular the United States and to a lesser extent, the European Union) have been artificially reducing interest rates by setting rates on bank loans to near zero. (In U.S. Federal Reserve has set the federal funds rate at 0% to 0.25%). This is the rate at which banks can borrow money from central banks. Since banks can borrow money without interest, essentially, have no incentive to pay high rates on deposits and charging without high rates loans. Interest rates will remain low until the central banks raise their lending rates to banks. Answer In addition to the relevant period 1995-2007. Interest rates are not particularly low from 1995-2001. By historical standards, they were more or less in the normal range. From 2001 to 2007, rates interest rates were low because the Fed kept the federal funds rate artificially low. The Fed first cut rates to combat the recession of 2000-2001, and then kept extremely low to cope with the financial impact of 9 / 11. Alan Greenspan (Federal Reserve chairman at the time) admitted that it was a serious error and was largely responsible for the housing bubble that collapsed in 2007.

interest rates

If interest rates by the central bank adjusted the same as commercial banks?

When central banks (such as Fed) to adjust interest rates, it is the same rate used by commercial banks? Do not give commercial interest rates banks like the Central Bank?

First, the notion that the Fed managed (or "set") interest rates at all is somewhat misleading. The Fed is simply following the market requirements and commercial banks (banks only add fractions of a percent of the skim milk in profit from the top). The graph shown in the following article.

The Myth of Interest Rates