Rates are crashing and fuel to the moon!

You need flashy thingy's.

 

So from what I gathered from others (very good) responses to me, fed rates do affect the interest rate you can get on a business/personal loan but maybe not as directly as what I was thinking.

So while you said that truck/trailer prices are a function of supply/demand and cost to build, which I'm not arguing that you're wrong (I think you're right, makes sense to me), in theory though wouldn't raising the interest rates (in layman's terms, ending the "free money" that loans with interest rates way below the inflation level basically are) help to create less demand for trucks and trailers? Because John Doe starts thinking twice about taking a risk with higher interest rated loans?

Anybody feel free to answer, I'm genuinely curious.

 

You’re right, think of borrowed money, the loan, as a product, and the interest rate is the price. Increase the price, decrease demand.

Because they can’t ever just leave well enough alone, an economist would object to that paragraph because it refers to interest rates, not “real interest rates”. Real interest rates are the interest rates charged, minus inflation.
Because we are in an inflationary period of, say, 8%, an equipment loan of, say, 6% has a REAL interest rate of -2%. The borrower actually gets paid, in inflation corrected terms, to borrow money.

That phenomenon is one of the reasons inflation can be difficult to reign in: people correctly assume they can buy things today with borrowed money, and pay less today while paying the loan back with deflated dollars much later. That increases demand, further creating inflation.

 

How's the Van freight been? All the heavy hitters on 2.0....

 

The struggle is REAL!!!!!

Soon there will only be shorthaul out of

 

$2.65 all miles after lease, includes 242 empty miles to the house after dropping the last one off. Can’t complain a whole lot given how things are going.

 

Absolutely. Not only because of what you cite, increased risk, but also the fact that a higher interest rate makes the payment higher for the same loan amount. If the payment on a $120000 truck loan increases by $200 a month, how many potential buyers simply get priced out of the market? Just like with mortgages, every increase means a larger percentage of applicants can't get past the underwriters.

 

A

 

Most have either been banned or have made so much money that they don’t have the time to read threads of struggle. That’s for the lesser esteemed. lol

 

Most are probably too busy doing short haul to post.