With the Fed’s recipe, borrowers win, and lenders lose, and retirees are in the latter category.
Joseph Sternberg’s “The Covid Fiscal Crisis Is about Debt and Taxes” (Political Economics, July 16) sagely describes the double wham
my that retirees face from the ripples of the pandemic. First, older people are disproportionately at risk of dying. Second, they have to deal with the challenge of maintaining their standard of living in retirement—e.g., longevity risk. As Mr. Sternberg points out, bond yields won’t get the job done in the new normal of interest rates. And the Federal Reserve well knows that given the World War II levels of debt relative to GDP, it will find itself bunkered in a low-interest-rate environment for the foreseeable future. Simply put, with the Fed’s recipe, borrowers win, and lenders lose, and retirees are in the latter category.
David Evans, CFP