The Fed lowered interest rates. Now your savings pay nothing, and your home is too expensive. Works for boomers though. Their home being too expensive is a good thing. But they won’t live to enjoy that wealth. And now we are in a Faustian trap. Make housing affordable (important and right thing to do) and with it we have to see the a ton of normal people go underwater on a leveraged investment.
But if we slowly raise interest rates we could avoid the shock.
Side benefit. AI’s hype train depends on being able to operate at a mammoth loss for the foreseeable future. That also depends on artificially low interest rates. Raise them, not only can you make housing affordable, but you also might kill AI.
There would be some job loss. All the AI jobs would go. I’m ok with this.
The Fed lowered interest rates. Now your savings pay nothing, and your home is too expensive. Works for boomers though. Their home being too expensive is a good thing. But they won’t live to enjoy that wealth. And now we are in a Faustian trap. Make housing affordable (important and right thing to do) and with it we have to see the a ton of normal people go underwater on a leveraged investment.
But if we slowly raise interest rates we could avoid the shock.
Side benefit. AI’s hype train depends on being able to operate at a mammoth loss for the foreseeable future. That also depends on artificially low interest rates. Raise them, not only can you make housing affordable, but you also might kill AI.
There would be some job loss. All the AI jobs would go. I’m ok with this.