Being too cautious on your investments may lead to losing more money due to inflation. Even though the inflation rates are currently at a record low in the USA, investing too defensively in assets may be a bad move. If you are too defensive, you may have interest even lower than the astoundingly low interest rates.
Some of the biggest banks are constantly under pressure by investors to communicate their monetary policy path, but Banks can be extremely cryptic and vague. Banks have been advised to communicate their monetary plans more effectively, but very few changes have been made.
Earlier this week, John Cryan, Deutsche Bank Chief Executive, called upon the ECB to change course, warning he is seeing bubble prices in stocks, bonds and property. Low interest rates are digging into banks’ profit margins and creating extra pressure in order for banks to make a profit.