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re: If trump wins I think housing rates will drop
Posted on 5/12/24 at 5:54 pm to LSUSUPERSTAR
Posted on 5/12/24 at 5:54 pm to LSUSUPERSTAR
quote:
Obviously zero was not sustainable but what should it have been?
The Fed doesn't just set interest rates in a vacuum. Even if they set them at 1%, where will that capital come from? Banks can't lend what they don't have. The reason that rates were so low for the past 15 years is demographic, not political. We had our largest generation ever, the Boomers, in their highest earning, lowest consuming years of their lives. That difference between their incomes and expenses flooded the market with capital looking for some yield anywhere they could find it to build their retirement nest eggs. Now that the Boomers are mostly retired, they can't tolerate risk, so that capital that was in the market seeking yield has been converted into cash and T-Bills. Capital is now more expensive because there's less of it. Demand up+Supply down=Price up. I know this being the PT everyone views things through a political lens, but this is just basic economics playing itself out. Even if re-elected, Trump isn't going to be able to do anything about interest rates.
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