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> However, rates can’t rise much more, or the UD gov’t will be unable to service its debt.

Treasury rates are less than 2%. Prior to 2019 they have never in history been lower[1], except for one month during 2016.

I don't think the market is worried in any way about the ability of the US to service a 2% rate.

[1] https://www.macrotrends.net/2016/10-year-treasury-bond-rate-...




Interest rates aren’t fixed at 2%. If they rise even to historically low standards, the federal government could have trouble servicing its debt.


Of course they aren't fixed! That's the point!!

They are dramatically lower than historical averages. Claiming that makes it hard to service seems counter intuitive!


Large share of federal government debt is short duration meaning it has to be rolled over at current rates on a regular basis. Rising rates would definitely drive up costs dramatically.


That's what the bond price is! It shows how much room there is for increased costs before there are any real concerns.




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