This week we continue our conversation with Tim Hopper, founder of Macro Fund Advisors. Previously Tim was managing director and chief economist for TIAA. Tim has over 20 years of experience writing and speaking about the global economy. Prior to joining TIAA, Mr. Hopper held various leadership positions in global banking and real estate. He also served as a senior economist with the Federal Reserve Bank of Dallas for over 10 years. Second of two parts – View part one

The Lead Left: What about the deductibility of interest expense? Is that at risk?

Tim Hopper: Too early to tell. If it isn’t a permanent fixture of the reform, it is possible that we could still get deductibility temporarily for a number of years to spur growth.

Going forward, the business cycle will look more normal. Interest rates will be higher than you think. We’re talking 3-4% down the road, not 2-3%. People forget that past cycles saw 5.5% ten year T’s. We might even get to 4% time.

It’s been different with this cycle. This was a credit cycle, not an industry cycle. A credit cycle takes longer to fix. But the good news is we are through the credit crunch.  It’s no longer an issue, and that means growth can finally accelerate.

TLL: So what exogenous issues could derail us?

TH: The traditional things mostly look fine. Excess corporate debt issuance is something to keep an eye on, but generally there are no industrial sectors overheating. At the moment the real  concerns lie overseas in exogenous political issues.