Fed’s Bostic Says US Faces a ‘Shaking Out’ on Refinanced Debts
- Many bankers haven’t seen high rates before, Bostic says
- Atlanta Fed leader sees pressure from high rates in all areas
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Federal Reserve Bank of Atlanta President Raphael Bostic said the US economy faces a period of some disruption as debts are refinanced at significantly higher interest rates, putting some pressure on both financial institutions and the government.
“We have a lot of existing debt out there that is at very low prices,” Bostic said at the South African Reserve Bank’s Biennial Research Conference in Cape Town. “When that comes due, they’re not going to be able to refinance into comparable prices. There’s going to be an adjustment that needs to happen on that. So I actually think there’s a shaking out that’s about to happen at all levels.”