How This Ends - Hackdot

Re:How This Ends by scarab92 on Sunday May 22, 2022 @07:31PM (#31473856)

That's only true if investors think the 10% rates are permanent. Future interest rates are a time series not a single value, and I suspect most will use a lower rate in later years reflecting some mean reversion.

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Re:How This Ends by MR4D on Monday May 23, 2022 @12:46PM (#31481419)

A 10% rate on a 30-year treasury, is for all intents, permanent.

Think of it this way - a person buys a 30-year bond yielding 10%. Then, for the next 30 years, no matter what happens to interest rates or prices, they will earn a 10% return on their original bond purchase, risk free.

Remember also that 30 years is approximately your adult working life, so a really long time that people tend to think of a “permanent”.

Is it truly permanent? No, but for purposes of discussion and financial planning, it’s close enough.

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Re:How This Ends by qq66 on Monday May 23, 2022 @02:48AM (#31476013)

But you can lock in rates for decades.

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