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12 May 2022

US Interest Rates: Consumer Debt

Yes, US interest rates are rising and that impacts the rest of us but seriously, how high can they go?

2% to 3%, probably but 5%, 6%, 7% or 8% is highly unlikely given that the US Government debt has breached US$30 trillion and US consumer debt has almost reached US$16 trillion (see above chart).

Put simply, the US is awash with debt, that is the elephant in the room and it is that fact that will limit how high interest rates will rise in this cycle.

Remember these words from Warren Buffett if the current correction in asset prices turns into a asset price crash…“Be fearful when others are greedy and greedy when others are fearful.”


At Newealth we are always looking to support and promote our clients wherever possible and if you have any ideas or comments, please feel free to email me or to call me on +61 2 9267 2322.

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