Why Permanently High US Interest Rates Could Be Here to Stay

Why Permanently High US Interest Rates Could Be Here to Stay
фото показано с : beincrypto.com

2023-10-16 10:30

Permanently high interest rates in the United States could be here to stay, according to economists. The markets are already beginning to factor in high rates and the premise that they may not return to the US central bank’s target.

On October 16, macroeconomics outlet The Kobeissi Letter said there seems to be a view that once inflation hits 2%, interest rates are going back down to historic lows.

High-Interest Rates Here to Stay?

However, it appears that the markets are already factoring in higher interest rates going forward. 

“Markets are pricing that the Fed funds rate will bottom at 4% in 2025 and then start rising again.”

“Higher interest rates are the new normal,” it noted before adding, “The era of ‘free money’ is over.”

Interest rates market forecast. Source: X/@KobeissiLetter

The Federal Reserve suspended its rate hiking in July. However, that does not necessarily mean they will automatically fall. US rates are currently a crippling 5.5%, having been hiked 11 times since early 2020.

Nevertheless, skyrocketing national debts may push the Fed into lowering rates quicker as interest payments surge. US national debt is currently at a record high of $33.56 trillion, with billions being added to the pile every day.

Last week, analysts at Goldman Sachs commented: 

“The main implication of the tightening in financial conditions led by rising rates is that the drag on GDP growth will last longer.”

They added other risks of high rates include “elevated valuations of risky assets in financial markets, the surprising survival of unprofitable firms in the corporate sector, and wide federal deficits.” BlackRock has also predicted that rates will remain high.

Read more: How To Prepare for a Recession: 11 Quick Tips

Moody’s Investors Service said that US companies face growing refinancing and default risks, with interest rates expected to stay high and financial conditions for borrowers tightening.

Moreover, consumer sentiment soured in October, with households expecting higher inflation over the next year. 

This week’s economic calendar reveals monthly retail sales data, which is also expected to decline. 

Impact on Crypto?

High interest rates hurt the average debt-laden consumer. They result in higher payments and rates on mortgage, auto, credit card, and bank loans. 

This means less available capital for higher-risk investments such as crypto or stocks. 

Moreover, high rates mean better returns on savings accounts. This means that there are incentives to leave cash in interest-bearing accounts rather than dabble in digital assets. 

Long-term high rates will impact economic growth by slowing it down. Persistently high rates also make the economy more prone to falling into recession if combined with other negative shocks, such as geopolitical tensions. 

The post Why Permanently High US Interest Rates Could Be Here to Stay appeared first on BeInCrypto.

origin »

Bitcoin price in Telegram @btc_price_every_hour

High Voltage (HVCO) на Currencies.ru

$ 0.0012187 (+0.56%)
Объем 24H $0
Изменеия 24h: 0.13 %, 7d: -0.82 %
Cегодня L: $0.0012066 - H: $0.0012233
Капитализация $0 Rank 8594
Цена в час новости $ 0.0147322 (-91.73%)

rates high permanently interest debt bank national

Источник: beincrypto.com

rates high → Результатов: 126


Фото:

Home Crypto Mining Spikes in Brazil Amid Record High Unemployment

With rising unemployment rates and rampant economic uncertainty, in the wake of the Covid crisis, a growing number of Brazilians are finding an alternative income source in cryptocurrency mining. GPU rigs have been spotted even in favelas as a relatively small investment can return more than the average salary in Brazil. Pandemic and Uncertainty Turn […]

2021-6-1 15:30


Фото:

Bitcoin Sets New All-Time High on Heels of OTC Buying Frenzy

Bitcoin and the aggregated cryptocurrency market are caught within another leg higher, with bulls staying in full control of the market This uptrend comes shortly after an intense selloff seen yesterday evening, which came as a result of incredibly high funding rates on margin trading platforms The move lower reset these funding rates and cleared out “late longs” – which laid the groundwork for a move higher One analyst explained in a recent tweet that […]

2021-1-9 22:35


Bitcoin Recovers from Overnight Plunge, But It’s in a “Dangerous” Position

Bitcoin saw some wild overnight volatility that came about after a flurry of selling activity liquidated long positions and sent its price reeling lower This selloff was quite intense and caused the aggregated market to face some immense selling pressure that is showing no signs of letting up One analyst explained that where the market trends next will undoubtedly depend largely on the derivatives market He notes that funding rates are still quite high and […]

2021-1-5 21:00


Фото:

Ethereum’s Rocketing Funding Rates a Grave Sign for Its Ongoing Rally

Ethereum has been severely underperforming Bitcoin in recent times, but this appears to be shifting as the cryptocurrency posts a breakout rally while BTC declines This uptrend has come about as long positions for the cryptocurrency rocket higher, reaching a fresh all-time high this week In tandem with this, ETH’s funding rate has also grown massively – which is typically a grave sign that a torrent of liquidations is imminent Ethereum has been able to […]

2020-5-30 23:00


MoneyMatch Works With Ripple to Provide Cost-Effective Global Payments for SMEs in Malaysia

MoneyMatch is a cross-border transfer service that helps small and medium-sized enterprises (SMEs) in Malaysia pay their global suppliers. As the country’s traditional financial institutions were charging high FX rates on the smaller volume transactions typically requested by SMEs and individuals, MoneyMatch partnered with Ripple to offer cheaper and faster payments to more than 120 … Continued The post MoneyMatch Works With Ripple to Provide Cost-Effective Global Payments for SMEs in Malaysia appeared first on Ripple.

2020-4-16 21:08


From Lending to Synthetic Assets: How DeFi Can Change in 2020

DeFi made its claim to fame with lending protocols that offer attractive yields. As these rates normalize, new age financial products could propel the space to greater heights.  Stablecoins and Yield in a Volatile Year In the first six months of 2019, Bitcoin spiked from a biennial low of $3,200 to a range high of […] The post From Lending to Synthetic Assets: How DeFi Can Change in 2020 appeared first on Crypto Briefing.

2020-1-8 08:55


Фото:

Bitcoin Trading Volumes Soar in Venezuela and Other Inflation Stricken Countries

Data shows that the volume of BTC transactions on the over-the-counter peer-to-peer marketplace, LocalBitcoins, has increased dramatically in countries suffering from high inflation rates. While the numbers are not quite as high as some of the most popular cryptocurrency markets in some of the larger developed nations like the United States, for example, trading volume […] The post Bitcoin Trading Volumes Soar in Venezuela and Other Inflation Stricken Countries appeared first on BeInCrypto.

2020-1-4 05:15


Deutsche Bank: криптовалюта — это наличные XXI века

Криптовалюта в конечном итоге может заменить наличные деньги — к такому выводу пришли специалисты Deutsche Bank в своем исследовании «Imagine 2030» («Представь себе 2030 год»). How do you imagine 2030? We predict the end of plastic credit cards, the end of high profit margins, and the end of low corporate tax rates.

2019-12-9 18:25


Dash CEO reveals latest strategies to improve much needed mainstream adoption

Some cryptocurrencies are technically superior on the back end. Some are based on a blockchain network that attains a high level of security and privacy. Another virtual asset facilitates rapid transactions but none of these factors would translate to the digital currency’s success if their adoption rates do not reach a widespread userbase.

2019-7-22 01:00


Dash’s Ryan Taylor reveals latest strategies to improve much needed mainstream adoption

Some cryptocurrencies are technically superior on the back end. Some are based on a blockchain network that attains a high level of security and privacy. Another virtual asset facilitates rapid transactions but none of these factors would translate to the digital currency’s success if their adoption rates do not reach a widespread userbase.

2019-7-22 01:00


Фото:

Crypto-Based Transfers Can Cut Remittance Costs in Africa by 90%

Remittances have become a lifeline for many people in Sub-Saharan Africa, but the cost of sending money via banks and money transfer operators remains punitively high. On average, it costs 9.3% (of value transferred) to send the equivalent of $200 to the region, the highest remittance rates anywhere on the planet, according to the new […] The post Crypto-Based Transfers Can Cut Remittance Costs in Africa by 90% appeared first on Bitcoin News.

2019-4-23 12:30


BitPay facilitates international payments through blockchain for Center Source SAS, a South American BOP giant

The Center Source SAS has partnered with BitPay to make international payments and settlements faster with lower transaction fees. Business to Business money transfers are usually plagued by high transaction fees while international B2B transfers, further have to deal with the foreign exchange rates. This are some of the problems that a new client to […]

2019-3-14 20:57


Venezuelan Economic Professor Shares Passion Behind Cryptocurrency Advocacy in Spite of Bolivars Uselessness

As many of our readers are probably well aware of, the South American nation of Venezuela is currently in the midst of its worst ever financial crisis— with inflation rates currently at an all-time high due to a host of international economic sanctions that have been levied against the nation. As a result of all […]

2019-3-11 19:42


дальше еще 77 новостей →

Партнеры Currencies.ru



Реклама на Currencies.ru

Самое свежее на Currencies.ru

No Soft Landing, No Return to Normal for US Economy, Says Fed

Jerome Powell, the Chairman of The Federal Reserve, has conceded that a so-called “soft landing” for the U.S. economy is something he cannot guarantee. The post No Soft Landing, No Return to Normal for US Economy, Says Fed appeared first on BeInCrypto.

‘Deranged Sociopaths’ and Higher Unemployment Can Fix US Economy

The former Secretary of the U.S. Treasury, Larry Summers, said that jobless rates must rise to curb inflation and fix the economy, provoking a robust pushback from the crypto community.  The post ‘Deranged Sociopaths’ and Higher Unemployment Can Fix US Economy appeared first on BeInCrypto.