Fed's Mester says impact of ageing on interest rates is unclear
The impact that older demographics will have on interest rates is unclear, a top US central bank official believes.
Speaking at the Cato Institute, in Washington DC, Cleveland Federal Reserve chief Loretta Mester said an ageing and more slowly growing population might push down on so-called risk free rates, as people looked to lower their risk.
However, at the same time they would be keen to draw down their savings in order to finance their expenditures, including by selling financial assets, thus pushing rates higher.
In any case, the Fed would need to be alert to the effects of those trends, Mester said.