2 ms·
If the fed buys us treasuries like they did in march, then the interest rates will remain low. Our debt holders like china, japan, and europe will be forced to
by macg 17y ago
If the fed buys us treasuries like they did in march, then the interest rates will remain low. Our debt holders like china, japan, and europe will be forced to buy our debt to keep the exchange rates favorable. A weak dollar means their current holdings are worth less and they have less ability to export goods and services. Us debt of these proportions is a gun to the head of the US debt holders. interest rates will remain low...like it or not.
- jswinghammer 17y agoThey will remain lower than what the market price for interest would be but I don't think the Fed can keep rates too low for too long. We're in the midst of a major capital shortage in the world right now. Eventually someone is going to want access to the savings bad enough to offer higher returns on capital. Right now the Fed is having a hard time keeping the 30 year mortgage rate down to where they want it.