Good morning, unless you are long and wrong as bond yields continue to drift higher: They say, ‘the trend is yer friend, ‘til it bends’ and while 10yy appear overSOLD (daily momentum — ie stochastics, bottom panel), perhaps we’ll need some sort of cathartic event which rinses OUT weaker handed longs and make folks re-think the narratives marketplace and then, once last man standing is OUT (or flipped short), THEN rates will rally? That will be THEN and this is now and so … here is a snapshot OF USTs as of 705a:
MMT folks almost got away with one had the pandemic almost sticksave them. Transitory. They told us. I almost believed them … underestimated political will after elections which have consequences.. maybe inflation itself would have been transitory without fiscal accelerators we may never know…I agree with you tho the path we are on is not a good one …
Pretty good analysis of the US Interest Expense Problem....
But those Expenses will soon jump because of the 500 bps increase that the FED has done
over the past 1.5 years.......
Also a Recession would certainly make the Annual Deficits larger and the problem worse....
Saw one estimate that by 2030, 20% of the Federal Budget will be Interest Expense.
My own Estimate is that by 2030, the US National Debt will be 40 Trillion.
Saudi Arabia and China have reduced their purchases of US Treasuries in recent years.
The US is on a very Risky and Dangerous Path.
The Supporters Of Modern Monetary Theory are badly mistaken.
The US can't Finance UNLIMITED DEBT, without risking a Crisis, that could lead to much
Higher Interest Rate and Onerous Financing Costs.
$ 40 T @ 4% = 1.6 T Interest Exp.
$ 40 T @ 5% = 2.0 T Interest Exp.
$ 40 T @ 6% = 2.4 T Interest Exp.
And these are Low Interest Rates........
Hell, the Current US Federal Budget is only around $ 6 T, in 2023.
We're at $ 33 T National Debt , now.
Have the Wall Street people become Kamikazes ????
It's INSANITY !!!!!!!
MMT folks almost got away with one had the pandemic almost sticksave them. Transitory. They told us. I almost believed them … underestimated political will after elections which have consequences.. maybe inflation itself would have been transitory without fiscal accelerators we may never know…I agree with you tho the path we are on is not a good one …