Article 3FJJ2 1950s prosperity or 1970s crash? Two ways a US interest rate rise could go

1950s prosperity or 1970s crash? Two ways a US interest rate rise could go

by
Edward Helmore
from on (#3FJJ2)

An interest rates expert ponders outcomes for the US economy as the central bank looks set to end the era of cheap money

Remember Quantum Leap? In the sci-fi show, time traveling scientist Sam Beckett would wake up in another era and have to work out where he was in history before solving this week's mystery. Well, that's the position the world's economists and traders are in this week.

Since the end of the last recession, interest rates have been at a historic low. Now, with wages rising and the global economy booming, central banks look set to end the era of cheap money. As stock markets panic about the short-term impact on share prices, Richard Sylla, the co-author of the seminal A History of Interest Rates, poses a longer-term question: where are we? The 1950s or the 1970s?

Everything tells me the trend is going to be up. The question is, what sort of trend will it be?

Related: Making millions from chaos: the fund cashing in on the stock market collapse

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