4 ms·
> It’s absolutely a risk premium It's objectively not–that's what CDS measure. > higher inflation expectations Not reflected in the data [1]. We can reasona
by JumpCrisscross 3mo ago
> It’s absolutely a risk premium
It's objectively not–that's what CDS measure.
> higher inflation expectations
Not reflected in the data [1].
We can reasonably debate if investors should treat the U.S. as a riskier credit. But these auctions, CDS data and other funding rates for high-quality non-U.S. dollar-denominated credits (e.g. Saudi Arabia's dollar-denominated debt [2]) do not show what the article implies they do.
[1] https://fred.stlouisfed.org/series/T10YIE https://fred.stlouisfed.org/series/T10YIE
[2] https://live.deutsche-boerse.com/bond/xs2747599509-saudi-arabien-koenigreich-5-75-24-54?mic=XFRA https://live.deutsche-boerse.com/bond/xs2747599509-saudi-ara...
- toomuchtodo 3mo agoForgive me if I defer to the bond market and treasury auction data. The data shows a path to a potential debt spiral and crisis based on yields demanded and debt outstanding. Current annual debt servicing expense is already ~$1T/year. https://www.pgpf.org/programs-and-projects/fiscal-policy/monthly-interest-tracker-national-debt/ https://www.pgpf.org/programs-and-projects/fiscal-policy/mon...
- JumpCrisscross 3mo ago> Forgive me if I defer to the bond market and treasury auction data TIPS are Treasuries. The breakeven-inflation rate is calculated entirely from Treasuries. > data shows a path to a potential debt spiral and crisis based on yields demanded and debt outstanding Sure. The data also–unambiguously–show that Treasury prices are not pricing in a U.S. default or runaway inflation.