Nomional rates and refinancing costs

CFA Level III Economics
#1

Hi all,

in one of MM’s Mocks, there is an explanation that with loose fiscal policy (=> real long-term growth up) and loose monetary policy (=>inflation expectations up), nominal rates increase. So far so good.

Why can I conclude now that “refinancing costs” increase? I get the point that if long-term nominal rates increase, my long-term borrowings get more expensive due to increased nominal return expectations but at the short end of the curve, e.g. if my financing is based on floating instruments, I should profit from the loose monetary policy (given lower rates due to loose monetary policy). High nominal rates would not affect me in a degree that would justify “more expensive refinancing”?

#2

Eventually things will catch up with you
Companies planning long term investments will want to medium/longterm term fixed rate debt.
US individuals less likely ot refinance fixed rate mortages.
You issue medium long term FRN eventually the higher coupons will catch up with you can borrowing costs over the whole loan would be higher.
You take cout short term loans you are eventually going to have to refinance into higher rates.