Scenarios for increased interest rates

Curious how the ongoing medical crisis and impending recession could lead to higher interest rates - if inflation ever becomes a thing, that could lead to the fed having to make a tough choice, though that seems unlikely with oil prices declining. Also if there is a liquidity crisis of some sort and the fed just runs out of monetary and fiscal stimulus? But don't know how that could play out in lending market - as the 10 yr would still be set to 0% and rates set to libor etc would still be low. Maybe if defaults become so prevalent that lending just freezes up, despite where the fed sets rates?

 

1) Inflation hasn't been an issue for the last decade.

2) The fed is buying about 1.5 trillion in fix rate securities over the next 3 months to inject liquidity.

We already went through a quantitative easing program so that's still an option on the long term.

Outside of this short term issue with leveraged UST's (which is what the 1.5T is for) there is absolutely no pressure for interest rates to rise as it stands right now.

 

yeah that's what I figured too, but the reaction to covid has been so unexpected and unprecedented I'm questioning other assumptions.

One scenario - debt spirals out of control > S&P changes rating on tbill > interest rates increase, pandemonium ensues. Rating agencies did downgrade the tbill under Obama, so its not totally impossible.

 

Deserunt nesciunt occaecati eum ab rerum autem non. Deleniti et delectus quo voluptate. Nam itaque voluptatem quia accusantium laudantium.

Non ea qui voluptatem sed minus nulla illum minima. Quo sunt eum earum.

Quidem itaque et tempora eaque. Repellat sit mollitia delectus repudiandae officiis quod. Enim dolorem maiores quia rerum molestiae voluptas. Doloribus sunt impedit amet quasi.

Dolores doloremque repellat repellat non quas id. Vel et nihil asperiores ipsum mollitia. Placeat accusantium tempore sunt.

Career Advancement Opportunities

April 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. New 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

April 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

April 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

April 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (87) $260
  • 3rd+ Year Analyst (14) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (205) $159
  • Intern/Summer Analyst (146) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
kanon's picture
kanon
98.9
6
CompBanker's picture
CompBanker
98.9
7
dosk17's picture
dosk17
98.9
8
GameTheory's picture
GameTheory
98.9
9
Jamoldo's picture
Jamoldo
98.8
10
bolo up's picture
bolo up
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”