Quote:
Originally Posted by Dpeck100
The rate structure is so complicated right now.
The rest of the world has much lower rates dragging ours lower. In many cases negative. That said the rates in the US will be low forever at this point because the debt is so large the interest expense can't be handled.
The budget deficit has risen for various reasons but the largest is interest expense. People are just not using common sense. When you have 23 trillion of debt and you constantly go to the markets for cash you are at the mercy of the current coupon rate. Our budget is around 4.3 trillion and a two point increase that lasts for five years will add well over 120 billion of interest and it just goes up over time as more debt is issued.
Low rates are here to stay.
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I heard an interview the other day with Campbell Harvey (the pioneer of the inverted yield curve theory) and lost my focus about halfway through it. Apparently it's been a pretty consistent indicator though.
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