Money For the Rest of Us
The Price of Money - 700 Years of Falling, Can Interest Rates Keep Rising?
Oct 25, 2023
Explore the historical forces driving the 700-year trend of falling interest rates. Discover how lower rates have boosted household net worth and reduced financial vulnerability. Dive into the factors behind the recent interest rate spike and the shift in marginal buyers. Learn about strategies to take advantage of higher yields without major risks.
24:38
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Quick takeaways
- Higher interest rates can put households in a more precarious financial situation.
- Factors such as economic development, increased savings, and longer life expectancies have contributed to the long-term downward trend of interest rates.
Deep dives
The impact of rising interest rates on households
Rising interest rates, such as an 8% 30-year fixed rate mortgage, can put households in a more precarious financial situation. Lower rates in recent years have helped household finances by increasing net worth and reducing debt balances. However, if rates continue to rise, it may be more difficult for borrowers to service their debt, impacting affordability for mortgages and other loans.
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