A high inflation rate can significantly reduce demand for US government debt. Same applies to corporate debt - that's why inflation indexed bonds exist (called

A high inflation rate can significantly reduce demand for US government debt. Same applies to corporate debt - that's why inflation indexed bonds exist (called TIPS for US debt). They are not a big part of the bond issuance atm but they could grow massively. In my outlined scenario the US gov won't be able to issue more TIPS because of their fiscal situation while profitable corporate issuers could.