July 30, 2023
ONE ECONOMY TO RULE THEM ALL:
Why the U.S. economy is so immune to rate hikes (Felix Salmon, 7/30/23, Axios)
Rate hikes in many other countries, especially the UK, hurt most of the population very rapidly, thanks to their high homeownership rate and how short-term their mortgages are.
The U.S. has positioned itself to be able to withstand rate shocks much more easily.
Household and corporate debt is mostly fixed-rate rather than floating-rate, meaning that debt payments don't immediately rise when rates go up.There's also less debt, overall, than there has been historically...
Debt is particularly low considering the rate of return on investment.
Posted by Orrin Judd at July 30, 2023 6:02 PM