The Intelligence from The Economist The Intelligence: higher-for-longer interest rates
6 snips
Nov 9, 2023 
Henry Kerr, Economics editor for The Economist, shares insights on the enduring high interest rates and their impact on the economy. Kerry Richmond Jones, an international economics correspondent, discusses how the ongoing Israeli-Hamas conflict could affect Israel's economic resilience. They dive into surprising U.S. economic growth amidst inflation worries and the implications of rising bond yields on borrowing costs. The conversation also touches on Israel's mobilization of reservists and its potential long-term economic challenges.
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Interest Rate Trends
- Economists' views on interest rates have shifted.
- They once debated a long-term decline, but now see higher rates persisting.
Bond Yield Implications
- Higher bond yields reflect expectations of sustained high central bank interest rates.
- This increases borrowing costs for households, businesses, and governments.
Economic Resilience
- Unexhausted pandemic savings and locked-in low interest rates have cushioned the economic impact of rising rates.
- American corporations even benefited temporarily from increased interest on cash holdings.
