◄ Go back
Phil Moris
Phil Morispublished in Stonks


What would be the impact if the Fed Funds Rate reaches 15% or higher?

Assuming inflation were to increase over the next few years, the Fed may need to hike rates to combat it, similar to what happened in the 80s. How would the broader economy fare in such a scenario?

I recently calculated my mortgage expenses, and at a current rate of 6.25% on a 600k loan, I pay around 4k/month, including interest and principal. However, at 15%, my monthly payment would jump to 7.5k/month. With approximately 250k in cash and equities saved up, and a monthly income of 4.5k from my job, I could survive for around 7 years with 15% interest rates, assuming my job remains secure and no other factors change. However, it's safe to say that not everyone has 250k in savings.

Would this lead to an economic collapse, or would it merely result in a slew of excellent deals for individuals with cash reserves and minimal debt?


Do you want to read more posts like this?

No one has commented yet.

If you’d like to be the first, please login and click on comments.