Higher interest rate-so what?

America's longest economic expansion which began in 1992 and lasted until now created some confusion among economists. What has happened? What factors drove this economy's longest expansion without contractions? All mysteries and declaration of the death of the old economy. Then we become curious. Will this continue? Then how long and what happens next? Contractions will come. No doubt about it. We have seen the signs of slowing economy this spring. Interest rose and stock price fell. Housing starts slowed and retail sales went down. Stock price may go up temporarilly but ultimately it will go down, dragging may sectors of economy into the negativity. Some people say. "Hey, economy slows then interest will not rise and we will see the soft landing with rising stock price and everything else. Let us go out grab a beer." Sounds good, isn't it? I'd like to say to him. "Hey, brother. People like you went out to borrow money to buy this and that to prop up this economy. Not any more. It cost you and companies more to borrow due to the high interest rate. Will you still borrow to dip your budget into the red? You won't. Would anyone else do it?" Bottom line is: "Do not underestimate the effect of the higher interest rate. You don't know what it is because it is not pushing you against the wall at least now. But, it will. Hold tight and fasten your seatbelt.