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If borrowing costs remain elevated, there will be greater downside risk for investments. But it's not all bad.
Our holiday from history has come to an end. I am referring not to world peace but to the zero-interest-rate environment so many people expected would last forever. Despite all the talk about when the US Federal Reserve will cut rates and bring back those holiday vibes, there is a very real possibility that it will not matter when the cuts happen or how many there are.
That’s because the interest rates that matter for much of the economy — longer term US Treasury bills — may not just be higher for longer: They may be higher forever. And that would mean a new era not only for investing but also for the economy.
Continue reading the entire piece here at Bloomberg Opinion (paywall)
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Allison Schrager is a senior fellow at the Manhattan Institute and a contributing editor of City Journal.
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