When rates are low, rules require companies to set aside more money because their bond holdings produce little interest. Conversely, higher rates help: Companies can earn more on their bonds, so they don't have to invest as much.A small increase in rates can produce big savings. The Pension Benefit Guaranty Corporation, a government agency that takes over troubled company pensions, must pay $110 billion in future benefits. It estimates that a 1 percentage point rise in rates would reduce the amount it needs to invest today by 10 percent, or $11 billion.
How Higher Rates Touch Consumers, Firms, Investors
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