The sudden change in interest rate policy has significant implications for private investors and various investment vehicles. Here are some of the key aspects influenced by the interest rate explosion:
Effects on the Stock Market
- Inverted Yield Curve: The return of the inverted yield curve, particularly between 3-month and 10-year government bonds, is seen as a warning sign for a possible bear market and recession. Historically, it takes an average of 6.3 months after such inversion for a bear market to begin.
- Short-Term Rally: Despite long-term risks, there may be a short-term rally as investor sentiment is negative, and small positive impulses could trigger a recovery.
- Challenges for Investors: Traditional strategies like ‘Buy the Dip’ show weaknesses as the US stock market faces new challenges. Uncertainty from political decisions and economic turmoil could have long-term consequences.
Effects on the Real Estate Market
- Recovery Trends: After a strong decline in recent years, early signs of recovery are emerging in the private real estate market. The granting of real estate loans has slightly increased, and interest rates for ten-year loans have decreased.
- Challenges from High Rates: Despite recovery trends, high interest rates and rising construction costs remain a problem for investors. Many planned construction projects are no longer financially viable, leading to a halt in investments.
Effects on Alternative Investment Vehicles
- Cryptosecurities: These offer new opportunities for investors, particularly through highly efficient and flexible issuances. They allow issuers to filter investors by origin and offer attractive interest rates, as seen with the bond from Donaustahl, yielding up to 8.4 percent annually.
- Venture Capital and Startups: Platforms like tacct are opening new capital markets for defense startups by utilizing cryptosecurities. This provides an alternative to traditional financing methods and could change the investment landscape.
In summary, the interest rate explosion has far-reaching effects on various markets and investment vehicles. While the stock market faces challenges, the real estate market shows initial signs of recovery. Alternative forms of investment such as cryptosecurities are gaining importance.