Economic Outlook and Interest Rates

The current economic climate is characterized by rising interest rates, which are necessary after prolonged periods of near-zero rates that inflated asset prices. Significant increases in rates are expected to cool down the economy, impacting sectors such as housing and durable goods; however, this adjustment is viewed as a natural phase in the economic cycle. Despite fears of a recession, many industries, including airlines and hospitality, continue to thrive, and consumer demand remains robust, indicating resilience in certain sectors. The presence of substantial governmental financial support during the pandemic provides an underlying stability, suggesting that a significant recession is unlikely in the near future.