Something I don't really understand which I am hoping you all can help clarify for me. The Federal Reserve is ending QE, increasing interest rates, and considering QT which I, for the most part, understand from a high level perspective. This is causing Treasury Bond yields to skyrocket, which I also understand from a high level of why that is so. What I do not understand is, when everyone talks about the future and the Federal Reserve continuing to increase rates, the biggest concern for everyone is 1) the U.S. economy, 2) house prices, and 3) the U.S. equities market.
Now, what I do not understand is, why has there been little to know discussion or concern for the current debt obligations of the Federal Government? Given we are continuing the practice of deficit spending, combined with our existing debt obligations which have yields at all time lows, wouldn't that mean in order to service those existing obligations the Federal Government would need to issue more debt at significantly higher yields to pay of the existing debt as it matures thus leading us into even more debt? Then throw on top of all that the American economy actually slowing down and the revenue of the Federal Government also starts to take a hit.
I guess I am just curious why this isn't being discussed as much, this seems like a major problem. Maybe I'm missing something or not understanding the current and future situation correctly. Thus, I have decided to see if you all could help provide some clarity. Thank you!
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