What if interest rates rise?


Interest rates have been rising and may continue to rise. There is no consensus as to how high they might go. Fortunately, the Federal Reserve is not incentivized to increase them beyond acceptable levels.


The United States government carries substantial debt, and higher rates would mean that it has pay out much more in interest as rates rise. Significantly higher rates would also be crippling for the countless Americans who carry consumer debt. There are other incentives for keeping rates at a reasonable level that we are happy to discuss with you.


Should rates rise to a level that leads you to believe your capital would be better invested in bonds or elsewhere, you are welcome to request a return of capital. It will be carried out according to the information in the “return of capital” FAQ.


Should bond rates rise above 10%, we would consider a temporary increase in the fund’s loan rates and preferred returns to match those of bonds.


Leave a Reply