• Profile picture of Seth Golden

    Seth Golden posted an update 3 years, 1 month ago

    4) What level of interest rates stresses the economy
    and Equities? Interest rates always rise to some degree asthe economy revives, but the risk of a negative feedback
    loop from higher financing costs to slower growth due to too much leverage isn’t even relevant when real rates are
    negative. Indeed, business cycles don’t end until real ratesare much closer to the rate of real GDP growth (chart 8),
    and Equity bull markets don’t end until the business cycledoes. So thinking transitively, the Equity bull market
    shouldn’t be threatened until real rates are well intopositive territory.

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