If you think rising interest rates are going to end the U.S. economic recovery, you’re wrong.
The U.S. Federal Reserve has kept interest rates near zero since the “Great Recession” began in late 2008. Now the Fed is expected to begin raising rates before 2015 is out.
Right now, it feels like every financial news outlet is trying to decipher the exact moment it will happen. CNBC will interrupt other programming to tell you the moment it does. The market will do a temporary “knee-jerk” when it hears the news. But don’t get caught up in the financial soap opera… higher interest rates will have little effect on economic growth.
In the four-minute clip below, Teeka Tiwari, editor of Mega Trends Investing, explains why rising interest rates will not grind the economy to a halt.
As Teeka says, we’ve lived through almost seven years of near-nonexistent rates. We’ve all forgotten the average “normalized” interest rate is 6%. Until interest rates exceed their historic, long-term averages… the economic recovery will continue.