As expected. As interest rates rise more capital that would otherwise be allocated on businesses, real estate, stocks, etcetera is redirected into safer and now more attractive bets like bonds and interest rates tied instruments
People have been "delusional" in a sense since the late 90's when inflation slowed to a crawl and everyone got used to stable prices. If inflation had been ~1% higher over these last decades, prices wouldn't be far off from where they are now and people wouldn't have flipped out so dramatically over the sudden adjustment.
Similarly, I find myself laughing when people describe this as a high-rate environment. Or when they blame the relatively brief Covid ZIRP for wide ills. The ZIRP of the 2010s is still confusing people.
There are 35 year olds now that were only just graduating college in 2009 (I'd argue before then most people are largely oblivious to economics) and don't know anything other than ZIRP plus the pandemic.
Unrelated to this exactly, but on perception: There was some sort of tax break that was going to be repealed around 2014 or 2015 that had been in place for around 10 years, and I got into a conversation with someone who didn't understand why so many were against it. Honestly I thought it was pretty obvious: Roughly school to retirement is 40-50 years, so for around 20-25% of the workforce that repeal wasn't a return to normal, it was a straight tax increase. They were actually surprised and had never considered that viewpoint before.
