Buying our own debt with newly printed money? What can go wrong?
Raise your hand if you did NOT see this coming.
those interest rates are going to be much higher by the end of the year
Wait till they see tomorrow’s 30 year auction.
The Obama Administration did not see this coming.
These birdbrains are going to crush their own program...garbage that it is.
The dollar’s getting waxed, the bonds are getting flattened, and all rates are soaring.
This will not end well. Not well at all.
The Treasury is going have to be selling lots of bonds to finance all the Federal spending. In order to lure buyers, interest rates paid on the bonds have to go up. With mortgages and other consumer loans tied to the 10 year Treasury bonds, that means consumers are going to be hit with higher rates.
Interest rates would be even higher, but the Federal Reserve has committed to buying $300 billion worth of Treasury bonds this year, in order to keep them off the market and keep interest rates paid on the bonds as low as possible. However, with the huge deficits coming in the next decade, interest rates are bound to rise. The slight of hand business where the Treasury issues bonds and the Federal Reserve buys them can’t last forever. In fact, the plan is only having limited success as it stands currently.