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> However, rates can’t rise much more, or the UD gov’t will be unable to service its debt. Treasury rates are less than 2%. Prior to 2019 they have never in hi
by nl 6y ago
> However, rates can’t rise much more, or the UD gov’t will be unable to service its debt.
Treasury rates are less than 2%. Prior to 2019 they have never in history been lower[1], except for one month during 2016.
I don't think the market is worried in any way about the ability of the US to service a 2% rate.
[1] https://www.macrotrends.net/2016/10-year-treasury-bond-rate-yield-chart https://www.macrotrends.net/2016/10-year-treasury-bond-rate-...
- nostromo 6y agoInterest rates aren’t fixed at 2%. If they rise even to historically low standards, the federal government could have trouble servicing its debt.
- nl 6y agoOf course they aren't fixed! That's the point!! They are dramatically lower than historical averages. Claiming that makes it hard to service seems counter intuitive!
- pmorici 6y agoLarge share of federal government debt is short duration meaning it has to be rolled over at current rates on a regular basis. Rising rates would definitely drive up costs dramatically.
- nl 6y agoThat's what the bond price is! It shows how much room there is for increased costs before there are any real concerns.