As the U.S. Treasury continues to issue trillions of dollars in new debt with relatively short maturities, there is a growing sense of unease. The strategy relies on the hope that interest rates will come down when this debt is ready to be rolled over, but if rates go up instead, it could lead to an explosive increase in interest payments.
Yellen & Co. are issuing trillions of dollars in new debt with relatively short maturities. They're hoping that when this new debt is ready to be rolled over, rates will have come down.
It's the same reason why some homebuyers get adjustable-rate mortgages: they're hoping rates… https://t.co/qqRWhf3PcO
— Wall Street Mav (@WallStreetMav) November 1, 2023
“Don’t forget pre-Covid … the federal government was 20% of GDP in spending. Now it’s 25% of GDP,” says billionaire investor Stan Druckenmiller. “My father told me if you’re in a hole, stop digging Stan.” pic.twitter.com/zxH8Hw7OBa
— Win Smart, CFA (@WinfieldSmart) November 1, 2023