Rising Interest Rates Signal Major Economic Shifts Ahead
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The price of money, reflected in interest rates, is determined by the balance of saving and investment. After decades of decline, it is now rising.
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Weaker economic growth and demographic shifts increased saving, while lower investment demand dragged rates down. This is now reversing.
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Higher rates will have big impacts, including potentially ending the housing boom and stock market surge.
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The US government will pay much more to service its huge debt with higher rates.
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For savers and the Fed, higher rates are a positive. But the overall transition will be wrenching.