“The average mortgage, already inflated by big rises in property prices, became 250 basis points more expensive – an increase of more than 20 percent – in the space of five months. “I pretty much got hit with a double whammy. I paid 50 percent more than an apartment would have cost previously and I got hit with higher rates. Now even a 25 basis point jump hurts.””
The above is from the Financial Times about one consumer’s take on higher interest rates.
However, this is not a story about the US, but about India.
The laws of economics are pretty much intact in the rest of the world; a global low interest rate environment has driven an increase in debt consumption and rising interest rates will have their impact globally. Though, the level of consumer indebtedness is different from country to country, higher interest rates are likely to slow down global growth. Economic data is a lagging indicator, especially when/if the government has anything to do with it. Conference calls of companies doing business overseas is a good leading indicator, as economic weakness will show up in their numbers long before it makes it into official government statistics.