Peter Brandt predicts interest rates of 7%: what does this mean for Bitcoin?

Trade veteran and Wall Street legend Peter Brandt envisions a scenario in which the US 30-year interest rate rises to 6.5 to 7 percent. He calls a drop below the level of 5 percent unlikely.

On Tuesday, this interest rate, which, among other things, drives the mortgage market, traded around 5.35 percent. This means that the 30-year interest rate is still below the October highs of around 5.67 percent.

If the 30-year interest rate does indeed rise to Brandt's targets, that could put Bitcoin (BTC), stocks and the housing market under considerable pressure.

From the local base of 5.22 percent, the 30-year interest rate has now sprung up again in the United States. This is now an increase of about 0.13 basis points.

The heated inflation report of October set interest rates in motion again yesterday. As a result, the 10-year interest rate climbed above 5 percent again. The higher the inflation, the more investors want compensation in the form of higher interest rates.

After yesterday, the market sees a virtually 100 percent chance of an interest rate hike in December. One even sees an opportunity of slightly more than 10 percent for a larger interest rate increase of 0.50 percentage points.

That pushed down Bitcoin and the rest of the financial markets. Although we are already seeing the stock markets quietly recovering today.

For the financial markets, the rise in interest rates is a bad development. The housing market is already struggling and will therefore be under even more pressure. We can actually say the same for Bitcoin, gold and the stock markets.

After all, higher interest rates mean that the financing costs increase for shares. In theory, this can slow down the AI investment cycle. At the same time, this results in less credit creation, which means less capital enters the system and gold and Bitcoin benefit less.

All in all, an interest rate of 7 percent, as Brandt predicts, could become quite painful. This would even bring the interest rate above the average of 6.15 percent measured since 1977.