We’ve had low interest rates propping up the stock market and speculative bubbles for far too long. This is why there has been too much cheap capital chasing returns over the last decade.

It’s a bubble of its own which we are starting to see pop in a number of sectors. (Private Equity firms and banks starting to show signs of strain, zombie businesses going under, AI bubble running out of capital sources and now tapping retail investors, crypto crash, etc.)

However this president is intent on getting us to 0% interest rates which will reverse that progress. Once the asset class can tap into essentially free money all of this progress will be undone.

If PE can get free capital every 7 years and sit on an appreciating asset while making renters pay for it, they will. If PE has to refinance that asset every 7 years at 7% or 8% interest suddenly the math doesn’t work especially in a slumping housing market.