Looking at the Brightside of High Interest Rates
By Michael D'Ambrosio | May 5, 2022
The ongoing frenzies in world economics and markets continue onwards, remarkably, interest rates are still high, and growing as we speak. The 10 year treasury rate has soared through the roof recently, peaking at 2.98 %, and currently sits at 2.82%. For reference, this is the highest it’s been since the end of 2018 and clearly enforces we are now removed from the rates of the pandemic. With these rates climbing, it brings about the opportunity for huge upside potential to bring in some nice returns. A higher rate means investors will be rewarded at a higher premium for their risk. For people looking to get their toes wet in this market, this couldn’t be a better time. From this time last year alone, the rate spiked from around 1.6% to where it is today. These rates help a plethora of individuals, such as those with Retirement funds, insurance companies, and educational endowments. Their money is now growing at a higher rate which puts more money in their pockets. Higher rates also benefit those who save, keeping money in savings during this time will only continue prosperous returns, but now at a larger amount. A huge upside from this current trend is that it’ll help moderate prices because people are incentivized to spend less and save more, money is removed and businesses and prices will slow down. Given the climate of today's prices such as gas, wood, and most simple commodities at all-time highs, a decline in these goods is much needed for the average American. A dip in prices means it’ll attack our society's absurd inflation rate, which recently hit 8%. Higher rates lead us towards a stronger economy, which is something our society needs given the boatloads of hysteria in the markets over the past couple of years. Now is an amazing time to get informed on investing and to get informed about some risks. Today is an excellent time to buy, you will be rewarded substantially and a higher than normal amount because of today’s climate.
Edited by Colin Jones and Zachary Elias