The Powell Put Won't Save Stocks | Joseph Wang
Forward Guidance
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The Effect of Raising Interest Rates on Demand
According to their textbook theory, you would just slow down investment and so forth. If the risk-free rate is higher, you're saying, hey, 2% I was going to lend money to this company to build a factory, but now that I get 2%, I'm not. So even if, let's say, they raise interest rates a bit, maybe I park some money at the Fed rather than go buy something. But it really depends on a lot of things. Nobody knows what the path of policy 10 years from now will be.
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