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milford · 02-25-2023, 06:07 PM

Quote:

Originally Posted by ownyourfuture

Copied from a message board.

Interest rates have been at a ridiculously low level for over a decade. Moving from this level to a more historically normal level in such a short period of time will create a huge shock. Lower interest rates leads to more borrowing & higher prices, higher interest rates leads to lower prices & less borrowing.

People who are heavily leveraged will not be able to pay their debt at higher interest rates. Prices will take time to be corrected to a more suitable level to balance out with the higher interest rates. This will be a painful transition.

There has been no shock with the huge rate increases because we started at historical lows also unless you have ARM mortgages/loans it won't affect you because most people are locked in for fixed rates for (5-30 years) so they are even coming out ahead if they have some cash flow to take advantage of the delta of their low interest rate mortage/loan vs. the current high interest rate for savings. The economy is humming along its going to take high interest rates for a while before cracks start to show up.

target2019 · 02-26-2023, 06:46 AM

We're taking part in the soft landing now, which will turm out to be two softs = one hard.

The shovel is Fed interest rates.

That is the land-based theory. People in boats can modify this.

frayne · 02-26-2023, 07:56 AM

Not hard, not soft but bumpy.

Lsbcal · 02-26-2023, 08:36 AM

FWIW, Jamie Dimon (Chase CEO) thinks a soft landing is still possible. He is privy to a lot of financial data.

target2019 · 02-26-2023, 10:57 AM

And he's worried about "scary stuff."

https://www.entrepreneur.com/busines...y-stuff/446384

Quote:

JPMorgan CEO Jamie Dimon believes the U.S. economy could still experience a "soft landing" after recent instability but warns of several uncertainties ahead.