In this article, it explains how traditional monetary policy is broken in the sense that it takes longer for the economy to see real effects. Another problem that was mentioned is if interest rates stay high into 2025 there could be major problems as many people and companies will be refinancing around that time causing them to feel the effects of high interest rates which on analysis suggested could cause large problems.
https://www.cnbc.com/2024/04/16/us-economy-will-see-more-things-break-in-2025-if-rates-stay-high-strategist.html
Even though rates still are on a rise I do not think that Atlaf Kassam has considered the historical patterns of the US economy. While he is concerend that the Federal government has tightend interest rates, in the very long run, it will go back down to an equillibrium. He is also very vague with what thing that will "break down" will be so Im curious what research and analysis his viewpoint stems from.
ReplyDeleteHopefully rates cool off and these problems won't persist. It will be interesting to see what the Fed will do.
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