TREE NEWS reports: St. Louis Fed President Alberto Musalem said strong demand for capital could keep interest rates above their historical levels for a long time, with current capital demand running at 3% to 4% of GDP and expected to persist for five to 10 years. He said the U.S. government has been on an unsustainable fiscal path for years and that government debt levels could eventually pose a risk, adding that the Fed does not concern itself with Treasury debt management.
Fed’s Musalem: Strong Capital Demand May Keep Rates Higher for Years
AI take
A structurally higher-for-longer rate regime is the quiet backdrop crypto and RWA markets have yet to fully price into their own narratives. If capital demand genuinely stays elevated for years, the opportunity cost of holding non-yielding assets rises, while tokenized Treasuries and yield-bearing RWA products become relatively more compelling. The tension worth watching is whether this framing hardens into a consensus that reshapes allocation logic, or remains one policymaker's view.
Generated by AI for reference only.
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