Oct 25 - Personal interest income plummets by $400 billion since 2008 as the Federal Reserve keeps interest rates near zero. Carmen Roberts reports.
Historically low interest rates have pushed personal interest income in the U.S. down by more than $400 billion since 2008. The Federal Reserve has held rates near zero for four years and says it wants to keep them at there through at least the middle of 2015. Government statistics show personal interest income fell from $1.4 trillion in late 2008 to $1.01 trillion earlier this year. The drop in interest income is a problem for retirees and other Americans who depend on that income from bonds, certificates of deposit and other short-term investments. The president of the St. Louis Federal Reserve, James Bullard, says those people counting on a certain amount of return from their investments will have to reduce their spending. A prospect that won't help many Americans or the U.S. economy.