30 October 2023
Rising interest rates pose significant threats to the economy and markets, magnified by the rapid pace of increases and prior risk-taking spurred by extreme monetary policies. Corporate debt, inflated by previously low interest rates, may become burdensome as higher rates increase the cost of debt servicing. This is also disrupting the long-term treasury market. Furthermore, the stock market is starting to acknowledge that the new higher “risk-free” interest rates are becoming a formidable alternative for investors, challenging the attractiveness of stocks for the first time in years.