Markets are buoyant this week on the Fed’s hints of potential rate cuts. But interest rates have been low for more than a decade already and there are downsides to persistently low interest rates: such rates have in the past caused the creation of bubbles. These are then rapidly deflated by rate hikes, recessions, or hiccups in the corporate bond market. There’s reason to worry we’re in a low-rate-fueled bubble today: just look at the venture capital market.
Image: Lynne Carty
