BRIAN KANTOR: Danger to US economy is not that interest rates may rise
Donald Trump might see that the market place is actively restraining the upward march of interest rates expected in the future
US President Donald Trump, being the businessman he was or is, woke up one recent morning worrying about interest rates and what the US Federal Reserve might do to his US economy (or perhaps his real-estate portfolio) with higher interest rates. Being Trump, he immediately tweeted his concerns to the world at large, so defying the convention that the Fed is, or should be, independent of political forces, causing predictable and intended consternation. But with more reflection he might have noticed that the market place was doing the job for him — actively restraining the upward march of interest rates expected in the future. Short-term rates, under the direct influence of the Fed, have been on the rise and are confidently expected to rise further over the next 12 months. The pace of further hikes is, however, expected to slow down to much more gradual increases over the next three or more years. The current yield on a one-year US treasury bill is 2.42% a year. In a year’s time, this...
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