Mar 25, 2024
Inflation and interest rates may play see saw with each other, but I do see how the both can become a base hurdle rate for investment evaluation when they get too high.
For instance, when inflation hits 10%. Real investment return must go beyond 10%.
For example, when interest rates (cost of borrowing) goes above 10%. The returns on equity must go beyond 10% for profitability to be possible.