Federal Interest Payments, Tredux
Federal Interest Payments, Redux
My previous commentary on dysfunctions with the Federal Interest Payment website. The data was finally updated after 205 days but other suspicions arose. Rate of increase in interest payments fell in the last two quarters, in spite of an additional $1.1 trillion in debt ($32.3T to $33.4T)
As I predicted back in March, the Fed is probably monetizing the debt to keep the 10-year yield zigzaging between 4 to 5%. I assumed a range of 4.5 to 5% but it looks wider, probably because the granularity of feedback is too coarse. But it's gonna get harder to juggle as the debt grows even faster. They'll keep suckering some money back to refinance at 4 to 5% rate but I expect inflation to exceed that and burn value off the refinanced debt.
Basically, the Fed is forcing that gigantic pile of $36 trillion to pay 5% interest while 10% inflation reduces its actual value.