Everyone's obsessed with rate hikes causing recessions. Here's what actually matters:
The real risk isn't the Fed raising rates. It's how overleveraged you are when they do.
Every cycle, same story: people borrow cheap money, chase returns, forget risk exists. Then rates go up and suddenly everyone's shocked that debt has a cost.
Look at history. Rate hikes don't kill expansions by themselves. What kills them? Excesses built during the easy-money years. Overvalued assets. Stretched balance sheets. Dumb bets made when capital was free.
The Fed doesn't create recessions. Bad decisions made during booms create recessions. The Fed just exposes them.
So stop obsessing over the next 25 basis points. Ask yourself: what stupid thing did I do when money was free? That's your biggest risk.
The real risk isn't the Fed raising rates. It's how overleveraged you are when they do.
Every cycle, same story: people borrow cheap money, chase returns, forget risk exists. Then rates go up and suddenly everyone's shocked that debt has a cost.
Look at history. Rate hikes don't kill expansions by themselves. What kills them? Excesses built during the easy-money years. Overvalued assets. Stretched balance sheets. Dumb bets made when capital was free.
The Fed doesn't create recessions. Bad decisions made during booms create recessions. The Fed just exposes them.
So stop obsessing over the next 25 basis points. Ask yourself: what stupid thing did I do when money was free? That's your biggest risk.