Discover more from The Real Signal - Real Estate + Macro - By Scott Choppin
The Real Signal Midweek - High Rates Are Not A Problem For Households
High Rates Are Not A Problem For Households
“Despite high debt levels and high rates… actual interest expense to households is still near multi-decade lows…
Corporate balance sheets will be a bit more exposed given the use of floating rate debt and shorter maturity debt (especially for non-IG borrowers). We are already seeing some issues there which will get worse if top line revenues/earnings/cash flow deteriorate with a weakening economy. At that point house house would be indirectly impacted as business cut costs, and ultimately jobs.”
Scott Choppin Note: Most household debt is fixed rate mortgage debt with long term time horizons. For the average household that rate is around 3% notwithstanding the actions of the Federal Reserve.
Source: @HayekAndKeynes on x.com