Market Overview Analysis by Lance Roberts covering: United States 10-Year. Read Lance Roberts's latest article on Investing.com
Recently, James Grant, editor of the Interest Rate Observer, was asked about his outlook for interest rates.
Let me state that I have a tremendous amount of respect for Grant and his work. However, I can’t entirely agree with his view. I will focus today’s discussion on the outlook for interest rates based on the two bolded sentences above. France, England, Russia, Germany, Poland, Japan, and others were devastated, with little ability to produce for themselves. America found its most substantial economic growth as theBut that was just the start of it.
Grant further suggests that interest rates will be higher due to increased debt and deficits. Unfortunately, there is no evidence supporting that hypothesis.As shown below, the 10-year economic growth average correlates with interest rates. When economic growth rises, lenders can charge higher interest rates.
Like today, the Fed was hiking rates to quell inflationary pressures from exogenous factors. In the late 70s, the oil crisis led to inflationary pressures as oil prices fed through a manufacturing-intensive economy. Today, inflation resulted from monetary interventions that created demand against a supply-constrained economy.the economy was primarily manufacturing-based, providing a high multiplier effect on economic growth.
Higher interest rates will increase borrowing costs, which leads to lower profit margins for corporations. Given the current push by Central Banks globally to suppress interest rates to keep nascent economic growth going, an eventual zero-yield on U.S. debt is not unrealistic.
France Dernières Nouvelles, France Actualités
Similar News:Vous pouvez également lire des articles d'actualité similaires à celui-ci que nous avons collectés auprès d'autres sources d'information.
Latest US inflation report may provide clues to future path of prices and interest ratesOn Wednesday, the government will issue the latest monthly inflation report, a set of figures that will be scrutinized by economists, Wall Street traders and Federal Reserve officials for any insight into that question.
Lire la suite »
Is Buffett’s Cash Hoard a Market Warning?Market Overview Analysis by Lance Roberts covering: S&P 500, Berkshire Hathaway Inc Class A. Read Lance Roberts's latest article on Investing.com
Lire la suite »
Benchmarking Your Portfolio May Have More Risk Than You ThinkStocks Analysis by Lance Roberts covering: S&P 500, US Small Cap 2000, US Dollar Index Futures, Legg Mason Inc. Read Lance Roberts's latest article on Investing.com
Lire la suite »
The Risk of Recession Isn’t Zero as the Market Seems to ThinkMarket Overview Analysis by Lance Roberts covering: United States 3-Month, United States 10-Year. Read Lance Roberts's latest article on Investing.com
Lire la suite »
No, Corporate Greed Is Not the Cause of InflationMarket Overview Analysis by Lance Roberts covering: McDonald’s Corporation. Read Lance Roberts's latest article on Investing.com
Lire la suite »
Electricity Demand Could Cure Debt ConcernsMarket Overview Analysis by Lance Roberts covering: Bitcoin. Read Lance Roberts's latest article on Investing.com
Lire la suite »