High-Interest Rates Could Cause 'More Things To Break' In US Economy By 2025, Warns Strategist
==========
Altaf Kassam, the head of investment strategy in EMEA for State Street, has warned that the U.S. economy could face turbulence in 2025 if the Federal Reserve does not act on interest rates soon. Kassam expressed concerns that traditional monetary policy mechanisms have 'broken' and any changes made by the Fed would take longer to impact the real economy, potentially delaying significant shocks. He attributed this shift to two factors: U.S. consumers securing long-term, fixed-rate mortgages during the low-interest rate period of the Covid-19 era, and U.S. companies refinancing their debts at lower rates. The effects of sustained higher interest rates may not be felt until 2025 when a big wall of refinancing is due, potentially causing more things to break.
#UsEconomy #InterestRates #FederalReserve #Turbulence #MonetaryPolicy #Mortgages #Refinancing