Given the huge and growing national debt, my bet is the Fed will take rates back down, assuming Treasuries will follow. It's the easiest non-inflationary way to drag things out. But, an important asset class (bonds) loses appeal due to low returns, creating more TINA (there is no alternative to stocks).
Apologies to my readers. I got this backwards and have corrected it on the website. Good catch, Tom.
Gene, I am confused by this statement. Am I missing something?
"In a simple investment model, ignoring risk, a business will borrow if the return on investment is lower than the cost of borrowing."
Given the huge and growing national debt, my bet is the Fed will take rates back down, assuming Treasuries will follow. It's the easiest non-inflationary way to drag things out. But, an important asset class (bonds) loses appeal due to low returns, creating more TINA (there is no alternative to stocks).