1. Data that I have seen indicates that most mortgage debt and S&P 500 corporate got locked in at long-term historically low rates by early 2022. The higher interest rate has had virtually no impact on our household. I think I saw that net interest paid by S&P 500 corporations is at its lowest ever as a percent of revenue/profit. So increased interest rates are largely only hitting marginal activity (new home buyers, small business, office CRE). Credit cards have gone up but most were at usury rates in 2021 already. unless you didn't need to use them. Given the limited supply of houses available for purchase, 7% mortgage rates are probably the only thing preventing house prices from exploding upward again which would cause the Fed to raise interest rates further.
2. Crypto: My understanding is that the FBI has gotten quite good at tracking the movement of crypto by criminals. So the demand there may be down quite a bit. They may be back to lugging satchels of C-notes around. I saw some commentary that Hamas has requested their donors avoid sending them Bitcoin due to tracking of it. Other than unbanked communities, criminals were probably the primary best use case for crypto-currency so losing one of them probably negatively impacts demand. But fear not, Wall Street and institutions investing in ETFs will step in to fill the demand void that criminals left behind - what could go wrong?
A couple of thoughts:
1. Data that I have seen indicates that most mortgage debt and S&P 500 corporate got locked in at long-term historically low rates by early 2022. The higher interest rate has had virtually no impact on our household. I think I saw that net interest paid by S&P 500 corporations is at its lowest ever as a percent of revenue/profit. So increased interest rates are largely only hitting marginal activity (new home buyers, small business, office CRE). Credit cards have gone up but most were at usury rates in 2021 already. unless you didn't need to use them. Given the limited supply of houses available for purchase, 7% mortgage rates are probably the only thing preventing house prices from exploding upward again which would cause the Fed to raise interest rates further.
2. Crypto: My understanding is that the FBI has gotten quite good at tracking the movement of crypto by criminals. So the demand there may be down quite a bit. They may be back to lugging satchels of C-notes around. I saw some commentary that Hamas has requested their donors avoid sending them Bitcoin due to tracking of it. Other than unbanked communities, criminals were probably the primary best use case for crypto-currency so losing one of them probably negatively impacts demand. But fear not, Wall Street and institutions investing in ETFs will step in to fill the demand void that criminals left behind - what could go wrong?