Posted on 04/18/2025 8:16:18 AM PDT by RandFan
US. gov will soon need to refi $9T. at these current rates it will be painful. Ideas?
I was being facetious. any idiot would know that. But your response is something that a suck up would say to the subordinates when the boss walked into the room. Your Holier than thou constitution virtue signaling ANYONE can do. Coming up with real solutions to a problem takes the subordinates effort when the superstars are too busy sucking up to do anything... ...add anything of substance to get the job done.
Stand there with the constitution in your hand and wave at all those passing you by to go to work(at least try to get a movement going)...
Sure, investors want sound returns.
The FED, the big banks and the institutional/deep pocket investors really got loose with going off the gold standard, prefaced by no longer backing the federal reserve notes in 1968.
The historical devaluation of the dollar really cranked up in earnest, leading to regular and, I think, engineered bouts inflation up & down and the corresponding busts and booms in equities..
That’s the theory/conventional wisdom isn’t it. How’s that working? Nothing like making life more difficult I always say. Wonder why President Trump would want to do that?
I really hope so, but even with all the firings my taxes were higher this year than last year and it’s still hard to find eggs for less than $10/dozen. I know folks who have lost 6 figures in stocks. Whatever benefits President Trump’s reforms may bring, they may not arrive in time to save many Americans’ retirement accounts.
I don’t like or trust Powell, but he is right to fight the lowering of interest rates. We don’t need anymore crack cocaine and the resulting hangover.
Trump “Lashed out at the Fed Chief?”
Trump said Powell was too slow, and was playing politics.
These are both true.
That’s not lashing out.
When The Donald lashes out, he is as cool as a cucumber, a Cool Hand Luke.They never see it coming.Trump is being kind, giving Powell a chance to shape up.....but he likely won’t .
Powell will soon be gone and he will likely resign,without even a whimper.
These foreign news services are hard baked in their lefty anti Trump spin.
This. Absolutely spot on.
Trump really wants lower interest rates.
Perhaps it’s due to the trillions of dollars’ worth of government debt that are rolling over in the next 18 months… maybe he wants to provide a tailwind to the economy… perhaps he wants to give the wobbly stock market a boost…
The problem is that even if Powell gives Trump the lower rates he wants, that doesn’t mean Trump’s desired outcomes will come to pass.
You see, the Federal Reserve only controls the federal funds rate – a short-term lending rate. The “Big Dog” that impacts mortgage rates, the economy, the stock market, and so on, is the 10-year Treasury yield. But for that, the market is the master puppeteer.
And according to legendary investor Louis Navellier, there’s one group within the market that’s in control today…
Meet the Bond Vigilantes!
To make sure we’re all on the same page, the economist Ed Yardeni popularized the term “Bond Vigilantes” in the 1980s.
It refers to bond investors who sell off Treasurys in response to what they perceive as irresponsible fiscal or monetary policies, like excessive government spending or inflationary policies. By dumping bonds, they drive up yields, effectively punishing governments with higher borrowing costs.
These investors act like “vigilantes” in the market, enforcing financial discipline when policymakers stray.
Now, April has brought an historic move in the 10-year Treasury yield from these Bond Vigilantes.
Last week, they stampeded out of the 10-year Treasury, causing its yield to soar from less than 4.00% to about 4.50% – the largest weekly gain in over a decade.
So, the question to ask is — what are the Bond Vigilantes worried about?
The better question is “what AREN’T they worried about?”
There’s the U.S. budget deficit that grew to $1.83 trillion last year. That’s equivalent to 6.4% of U.S. economic output, marking the highest reading other than the COVID-19 pandemic.
So far in fiscal year 2025 (covering the first half of the fiscal year), the deficit has climbed to more than $1.3 trillion. This is the second-highest six-month deficit on record (second only to Covid).
Then there’s the overall national debt, which is ballooning – and accelerating. It’s now nearly $37 trillion, growing at more than $1 trillion about every 100 days.
The current debt-to-GDP ratio clocks in at 123%. Long term, this is unsustainable. It will result in either an economic or currency collapse.
Next up is the size of our government’s interest payments that are based on the size of our debt and today’s elevated interest rates.
Here’s the non-partisan thinktank Peter G. Peterson Foundation:
The Congressional Budget Office (CBO) projects that interest payments will total $952 billion in fiscal year 2025 and rise rapidly throughout the next decade…
Relative to the size of the economy, interest costs in 2026 would exceed the post-World War II high of 3.2 percent…
The federal government already spends more on interest than on budget areas such as:
Defense
Medicaid
Federal spending on children
Income security programs, which include programs targeted to
lower-income Americans such as the Supplemental Nutrition Assistance Program; earned income, child, and other tax credits
Veterans’ benefits
In fact, interest payments will exceed the amount that the federal government spends on Medicare (net of offsetting receipts) this year, leaving Social Security the only program larger than net interest.
To be clear, monthly Treasury data comes with a lag. So, we don’t know exactly who sold bonds last week. But there are suspicions – and culprits aren’t limited to U.S. sellers.
The two biggest foreign holders of U.S. debt are China and Japan.
China clearly has a motivation for dumping our debt, and some analysts believe they’re holding the smoking gun.
But regardless of who is behind the selloff, the bottom line remains: big players have been bailing on the 10-year.
Firing Powell isn’t going to solve this fundamental problem. Only Congress can by cutting on unnecessary spending BIGLY. Unfortunately, it ain’t gonna happen.
We may have a 53 to 47 majority in the Senate, but several Republicans are PRACTICALLY like Democrats when it comes to spending.
This and other special jobs have people appointed for a specific term of service. Do we really want any president whether they are Democrat or Republican to have the power to fire. Firing should only be for gross violations of rules of service, after adjudication.
The people elected this administration and fully expect that the goals will be carried out.
Re: 51 - good grief.
All because Powell is doing his job and you disagree with his policy decisions.
this wasnt about powell... he was just collateral damage from going off outta frustration over everything going on. i’m guilty of that but nothing else..
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