“Many American investors bought Puerto Rican bonds over the past five years as we all searched desperately for yield in the face of the Federal Reserve pushing interest rates down to historic lows. Normally, investors understand that higher yields come with greater risks. However, during the past six years of extraordinary interventions by the Fed into all sorts of financial markets, many investors may have decided that those higher yield investments weren’t really all that risky. Puerto Rico’s problems may serve as a much-needed wake up call to investors. As rates rise, capital will move back toward safety and the risk premium demanded of higher risk projects is likely to increase.”
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Tip Freedomwat.ch Staff with Bitcoin
Tip Freedomwat.ch Staff with Bitcoin
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