Low Interest Rates Prompt 'Reach for Yield:' Berner

The video discusses the concept of interest rate illusion, highlighting how nominal and real rates have decreased, affecting business investments and profits. It explores the role of the Office of Financial Research in addressing financial stability threats and the risks associated with low interest rates, such as reaching for yield behavior. The global interconnectedness of financial markets is examined, emphasizing the potential for shocks to spread internationally. The discussion also covers the impact of global economic conditions on the US, including the influence of a strong dollar on corporate profitability and the need for policymakers to consider these factors.

What vulnerabilities does rising debt in corporate America present if interest rates increase?

In what ways should policymakers and investors reconsider their approach to risk in the current financial climate?

How does the strength of the dollar impact corporate profitability and economic activity?