The 30-year yield is 2.97%. The way you read those figures from the 30-year line is that the US can borrow $98.19 today, and have to pay back $100 plus a $2.88 coupon in 30 years. That's not a lot of interest. And if it weren't for the use of interest rates to fight inflation, it could potentially be driven lower.
If the US could borrow $100 today and pay back $99 in 30 years, a negative rate, what would be the right amount to borrow?
The USD is safe because the borrowing is:
- in dollars
- from Americans (to a great extent; "In June 2021 approximately $20.9 trillion of outstanding Treasury securities, representing 74% of the public debt, belonged to domestic holders. Of this amount $6.2 trillion or 22% of the debt was held by agencies of the federal government itself")
- matched by real economic growth still
- and the US has adequate domestic oil production for its needs
There undoubtedly is a limit, but we're not seeing warning signs yet.
https://www.bloomberg.com/markets/rates-bonds/government-bon...
The 30-year yield is 2.97%. The way you read those figures from the 30-year line is that the US can borrow $98.19 today, and have to pay back $100 plus a $2.88 coupon in 30 years. That's not a lot of interest. And if it weren't for the use of interest rates to fight inflation, it could potentially be driven lower.
If the US could borrow $100 today and pay back $99 in 30 years, a negative rate, what would be the right amount to borrow?
The USD is safe because the borrowing is:
There undoubtedly is a limit, but we're not seeing warning signs yet.