The Fed has raised interest rates by 525 basis points since early 2022 to head off a surge in inflation. Spitznagel believes, however, that excesses built up in the years of ultra-loose monetary policy that the U.S. saw since the 2008 global financial crisis have not yet been squeezed out of the economy.
“This economy is built on low interest rates,” said Spitznagel. “There are lag effects when you reset interest rates like we had.”