The longer interest rates remain high, the greater the risk of financial trouble. Joe Biden’s term in office began with the resurgence of a trend in inflation that had disappeared three decades ago, and it could end with a financial crash in the US. An office real estate crisis, a venture capital downturn, the risk of unlisted debt, Wall Street’s artificial intelligence bubble and abysmal deficits: The signals are proliferating, raising fears that the blue skies of full employment and growth might turn into storm clouds, brought on by persistent inflation and high interest rates, both slow poisons for the national economy.

The country got a taste of this in March 2023, when one regional bank after another went bankrupt for making rookie mistakes. They had made long-term investments with their clients’ funds and were then squeezed by the general rise in rates: Their customers withdrew their deposits to discover short-term remuneration equivalent to that offered by the Federal Reserve (Fed) – 5.25% per year – while the value of their long-term investments had fallen (when rates rise, the value of a bond falls to adjust in line with the market). The fire was put out by the Fed and J.P. Morgan, Wall Street’s “boss” in the event of a serious crisis.

One year later, high rates have continued to spread their venom. As is often the case, crises come as a surprise, emerging where no one saw them coming, often because the system is not transparent and does not allow for risk assessment. Private finance will feel the impact first – though not “private” as opposed to “public” (almost nothing is public in the United States), but rather as opposed to “listed on the markets.”

The first issue is office real estate. The 2010s were characterized by a frenzy of construction, which crashed up against the wall of Covid-19 and the mainstreaming of remote work, especially in expensive cities such as New York, San Francisco and Chicago. With 110 million square meters of vacant office space in the country, landlords are caught between plummeting rents and occupancy rates and rising interest rates. The Wall Street Journal (WSJ) examined securitized real estate loans, which account for less than 15% of loans but give a good indication of the state of the market.

Within 12 months, $18 billion (€16.6 billion) of securitized loans will have to be repaid – double the figure recorded in 2023. According to the WSJ, only 35% of the loans have been repaid at maturity as scheduled in 2024, compared with 99% in 2021. This is worse than the 37% repayment rate that was reached in 2009 in the wake of the great financial crisis, according to Moody’s Ratings. These non-repaid loans are not necessarily the result of bankruptcies, but renegotiations or extensions. Nevertheless, the tension is high.

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A day after former US President Donald Trump was handed over the historic guilty verdict in the infamous hush money case, his campaign said that it had shattered its own fundraising record. On Thursday, the business mogul turned politician created history for all the wrong reasons after a 12-member jury found him guilty of falsifying his business records.

According to the Financial Times, Trump’s campaign raised almost twice as much money than on any previous day. The money was raised through an online donor platform.

The campaign said on Friday morning that it had raised $34.8mn following the verdict. It is pertinent to note that with this verdict, Trump became the first ex-president ever to be convicted of a felony. He was found guilty on all 34 counts and was accused of hiding the hush money given to adult film star Stormy Daniels from his business records.

The campaign site briefly crashed 

Trump’s campaign said that the amount was nearly double the sum garnered on its best-ever day on the WinRed donation platform. With the massive inflow of donations, the site briefly crashed as well.

“President Trump is fighting to save our nation and November fifth is the day Americans will deliver the real verdict,” said Trump campaign senior advisers Chris LaCivita and Susie Wiles in a statement.

Shortly after the verdict started making headlines, Trump’s campaign moved within minutes to start a donation drive and went on to refer to Trump as a “political prisoner”.

“I was just convicted in a RIGGED political Witch Hunt trial,” wrote Trump on the campaign page. “I DID NOTHING WRONG!”

Even before the verdict, Trump’s campaign has stepped up its fundraising efforts, including holding events with oil barons in Texas and a planned June trip to Silicon Valley.

Jason Thielman, who runs the official Senate Republican campaign also noted the spike in the campaign funds. “Outrage over the sham verdict against Trump has spurred average Americans into action!” Thielman wrote on X, formally known as Twitter.

Outrage over the sham verdict against Trump has spurred average Americans into action! The NRSC just had its largest online daily fundraising haul of the cycle. The people are energized and determined to take back the White House and Senate!

— Jason Thielman (@ThielmanJason) May 31, 2024

“The NRSC just had its largest online daily fundraising haul of the cycle. The people are energized and determined to take back the White House and Senate!” he added.

Not only this, Google searches for DonaldJTrump.com and WinRed spiked over 5,000 per cent, the “Trump campaign website” jumped over 1,000 per cent and the “Biden campaign website” saw an increase of over 350 per cent, Financial Times reported.

Billionaires like Stephen Schwarzman, Bill Ackman and Miriam Adelson have expressed their intentions to support the former president in the upcoming elections.

With inputs from agencies.