3 ms·
Only recently turned positive, it was negative until September: https://fred.stlouisfed.org/series/REAINTRATREARAT1YE https://fred.stlouisfed.org/series/REAINT
by Bubble_Pop_22 4y ago
Only recently turned positive, it was negative until September:
https://fred.stlouisfed.org/series/REAINTRATREARAT1YE https://fred.stlouisfed.org/series/REAINTRATREARAT1YE
> High nominal interest rates are clearly themselves still bad for business
I don't get why nominal matters. Say you borrow 100k and have to pay it back with interest 1 year from now. Inflation rate as measured by CPI/PCE is higher than the interest rate of your fixed rate loan. What you do is basically mobilize that capital and transform it into products and services that you'll sell to customers.
Inflation works in your favor because prices of the goods that you sell during the year following you taking a loan, they rise at a higher rate than your fixed rate loan
- liuliu 4y agoBad for tech business whose cost is aggressively on R&D and revenue not inflation-proof.
- Moissanite 4y agoGreat in theory - but in practice you can't manufacture your product due to supply chain issues triggered by economic uncertainty and under-investment by your suppliers. Even if you could get your product out there, consumers aren't inclined to make new non-essential purchases when their household finances are being strained by mortgage and car loan rate rises.