Daily Price Movement / General Discussion, page-13221

Actually a good read in the AFR today about US interest rates and inflation and the environment we find ourselves in for many years to come - especially worth a read for those worried about much of the crap posted on here by people who do not have even the most basic understanding of macroeconomics and think we're heading back to 17% interest rates or some sh*t.

https://www. afr .com/companies/financial-services/making-sense-of-the-market-s-curious-fed-reaction-20210620-p582ko

Some key points:
- When people actually bother doing some research, the Fed is saying something like 0.5% rates in 2 years. Read that again. 0.5%. Not 5%, not 10%, or any other preposterous number.
- Now that household, corporate and government debt has swelled even further, central banks cannot raise interest rates very high without the effect being too great on the economy and markets - put simply, the more debt there is, the lower the increases in interest rates need to be to achieve the desired outcome.
- The best example of this? The Fed was only able to increase rates to 2.5% during the last tightening cycle before it impacted growth. 2.5%. Now with trillions of dollars more in debt, what would they need to increase rates to this time around to slow down growth? Well here's an idea - go ask a bunch of new homeowners in Sydney or Melbourne what their current mortgage balances are, then have a think what's going to happen when rates go up by even 1%.

The amount of sh*t posted in these forums and many media outlets by people who have no actual understanding about the relationship between interest rates, debt and overall spending/growth is exhausting, and many would do well to broaden their research about these issues, especially if investing in high-growth companies.