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The fed funds rate was above 10% on avg between 1979 and 1984. If rates that high for that long were necessary to contain inflation, could we afford that at thi
by dmm 4y ago
The fed funds rate was above 10% on avg between 1979 and 1984. If rates that high for that long were necessary to contain inflation, could we afford that at this point? Wouldn't the rates paid on the federal debt have to go way up as well?
- refurb 4y agoTreasuries have maturities up to 10 years, so some bonds that will mature in 2030 (and new bonds need to be reissues at current rates) were issued at rates from 2020. Thus, a relatively large portion of the federal debt may be isolated from a relatively short (3-5 year) jump in rates.
- vitaflo 4y agoTreasuries go up to 30 year maturities. In fact, the 30 year Treasury used to be the leading indicator for the bond market. Most use the 10 year now though.
- refurb 4y agoYou are correct, I was thinking the distinction between t-bills, treasury notes and treasury bonds, which denote different maturity length.