Dan Niles hedge fund manager, predicts 4 - 5 times this year, which will cause the stock market to drop20%.
Yes, they will but probably not enough to turn inflation. I could be wrong and always reserve that possibility but I don’t mind.
Things are relative. In the late 70s common interest rates were 6 to 7%. It took a lot to make that look low or something else high. This generation of borrowers are accustomed to rates less than half the old amounts; like 2 to 3% and on top of that have inflated the price of housing and other things to match that cheap as dirt borrowing cost. It may not take much increase in rates to shake them to their knees. The new generations believe 2 to 3% is a given and it isn’t. When the price of a mortgage goes up 50%, and that only takes a 1% or so increase in rates, the payments on inflated housing go up correspondingly. We may see how that swallows soon.
Raising rates has to be done. There will be winners, losers, and whiners as this process is implemented.
It is a process and it is important to keep that foremost in your mind as one considers the whole picture.
Who loses with rate increases?
Who wins with rate increases?
And who are the one’s that are going to make a lot of noise about how bad things are, will be, and on and on.
The question is if you have funds, stocks, assets where do you move them to NOW to take advantage of the rate increases? Are you even able to make those moves? Many are not in that favorable of a position. Speak with your Financial person about what is best for you.
Investopidia Recommends:
KEY TAKEAWAYS
Investing in rising interest rates can be successfully done by investing in companies that will do well with higher rates—such as brokers, tech and healthcare stocks, and companies that have a large cash balance.
Investors can also capitalize on the prospect of higher rates by buying real estate and selling off unneeded assets.
Short-term and floating rate bonds are also good investments during rising rates as they reduce portfolio volatility.
https://www.investopedia.com/articles/investing/120715/10-ways-profit-interest-rate-increase.asp
yes, they will raise rates and there will be a recession
Yes.