Rates are high but credit is easy - Why aren't interest rates slowing activity?

Northern Trust / Money Market

10-09-2026

High Rates, Easy Credit and El Niño Shape the Economic Outlook

Northern Trust economists Carl Tannenbaum, Ryan James Boyle and Vaibhav Tandon assess shifting Federal Reserve policy, financial conditions and emerging climate risks.

The Fed is moving toward a more conventional policy framework, with greater reliance on short-term rates and less use of balance-sheet tools.
Despite elevated policy rates, strong markets, tight credit spreads and private capital are keeping broader financial conditions relatively easy.
A strengthening El Niño could disrupt agriculture, trade routes and food prices, with Asia-Pacific economies particularly exposed.

Explore the full report for deeper insight into these monetary, financial and climate-related risks.

Money Market