Can the US economy sustain “fair value” interest rates?

Jack Ablin, CIO of Cresset Wealth Advisors, appeared on Fox Business Network’s “Making Money with Charles Payne” on November 19, 2018 to discuss recent stock market developments and the impact of higher interest rates on the property market. He points out that the plunging FANGs are the last group of stocks to roll over in the current market correction: two-thirds of the S&P 500 companies are already trading below their 200-day moving averages. Jack expects the US economy to slow somewhat as interest rates normalize, but the question is whether or not the economy can sustain what he believes is the “fair value” interest rate of 4.5% on the 10-year US Treasury note. He sees higher rates, with mortgages now above 5%, taking a continued toll on both sales of existing homes as well as new construction, extending the trend.

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Cresset is an independent, award-winning multi-family office and private investment firm with more than $60 billion in assets under management (as of 11/01/2024). Cresset serves the unique needs of entrepreneurs, CEO founders, wealth creators, executives, and partners, as well as high-net-worth and multi-generational families. Our goal is to deliver a new paradigm for wealth management, giving you time to pursue what matters to you most.

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From Chief Investment Officer, Jack Ablin.