Bloomberg Surveillance · Thursday, July 9, 2026
Steve Englander of Standard Chartered Bank explains that rising real interest rates, reaching their highest levels in years, are attracting capital to the US dollar. He likens the US to a 'hedge fund' borrowing from saving nations and investing, driven by positive productivity and supply shocks, which makes borrowing more attractive. This contrasts with situations where higher rates are driven by deficits.
“What you've seen is that real interest rates have moved up to the highest levels you know in recent years.”
“Fine, yeah, and it could go higher. And the key is going higher for good reasons. Coming back to Wixcel, the idea being that the equilibrium real interest rates reflects the return to capital, and a positive return to capital attacks capital. So the US is like a hedge fund. We borrow from the places that save and we invest in.”