What Could Go Wrong?

Officials may struggle to cut interest rates to zero and keep them there due to the risks of ultra-loose monetary policy and the altered inflationary environment. The economy might not experience a hard landing but could face default cycles in various sectors, with floating-rate borrowers and commercial real estate investors being immediately vulnerable. The negative forces may continue for years, affecting fixed-rate borrowers with maturities in 2026-2028. Overall, the situation is not expected to create mass hysteria but won't prompt massive interest rate cuts either.