The immense fiscal cost needed to limit the damage wrought by the COVID-19 pandemic isn’t frightening bond investors.
He noted the same report from the CBO estimated the U.S. federal government’s cost to service its debts would amount to 1.1% by 2025, which would represent the lowest level since World War II. One overlooked point, Drut said, was the Fed would transfer the income earned from its $6.35 billion holdings of agency mortgage-backed bonds and government paper to the U.S. Treasury Department. This would help to offset the hefty bills incurred by Washington.
Sheets noted the 10-year yield’s depressed levels were a sign that investors were not suffering much indigestion as they absorb the federal government’s ballooning debt issuance. “There’s no sign that we are having trouble clearing auctions at this point,” said Marvin Loh, senior global macro strategist, told MarketWatch.
Higher interest rates could complicate the Treasury Department’s task of funding large budget deficits as the market’s compliance would be necessary to roll over any coming maturities every year.And in the distant future when the Fed chooses to normalize monetary policy, interest rates would still remain low as natural long-term interest rate, or the neutral rate, is much lower than before as Americans get older and productivity growth slows.
Because stocks only go up
Cause none of you fucker will have to repay the loans that are saving your asses, that's why. Debt is perpetual now. It should at least benefit everyone and not just those who smart enough to understand how things work.
Because 25% of the market value is tied up in 5 companies that are not connected to that debt?
Would not touch the greedy corrupted stock market with $100 of my money. It is overdue for a big correction, then I will talk. Pandemic, huge unemployment and up she goes? What? You don't need to be a economist to understand this is fake.
Because of ignorance and China hasn’t dumped their holdings yet.
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Source: CNBC - 🏆 12. / 72 Read more »