The cheap-money party is still over
Jason Furman, the former White House economic adviser, basically delivered the financial version of “don’t wait up.” His message: higher interest rates are likely sticking around because the U.S. government and businesses are both reaching for the same thing — capital. When demand for money stays high and supply doesn’t magically expand, prices don’t exactly go on sale.
Why investors should care
This is one of those macro warnings that quietly touches almost everything:
- Borrowing gets pricier for companies trying to refinance debt or fund expansion.
- Valuations can get squishier, especially for long-duration growth names that live on future cash flows.
- Treasuries and debt markets stay front and center if government borrowing keeps ballooning.
Furman also pointed to the U.S. national debt crossing $40 trillion, which is the kind of number that sounds made up until it starts showing up in every policy debate. His fix list wasn’t exactly subtle: Congress will eventually need to deal with the fiscal gap through some mix of spending cuts, tax hikes, or both.
Big picture
No one likes hearing that rates may stay sticky, but markets usually don’t care about vibes. If the government keeps competing with everyone else for money, investors may need to keep adjusting to a world where capital is more expensive than it was in the 2010s. That’s a very different playbook than the one we’ve all gotten used to.