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jmoak10/13/20240 repliesview on HN

Yes. If the short term rate banks can lend to each other (the fed funds rate set by the central bank) is lower, then all downstream longer term rates / bond yields tend to fall:

https://www.cnbc.com/bonds/

This is simplified, but:

Say you have a billion dollars in cash. With rates at 0% and inflation at 2%, you might as well spend that cash by hiring some engineers and chasing a hit product. Or an OK product.

With rates at 5% or so and 2% inflation you can make decent money keeping your cash in a savings account paying 5% YoY. Unless you're sure you have a good idea, you might as well park the cash and skip out on all of that "hiring engineers" business, which may not result in a good product anyway.