How Trump’s Fed Showdown Could Trigger a Global Financial Earthquake – Are You Ready?
The 10-year yield on Treasury notes yesterday was nearly 4.4 per cent, the second-highest rate of the G7 countries.
Only the UK Government, which has to pay more than 4.6 per cent on 10-year gilts, has a higher cost for financing the national debt.
Were the Fed to be seen to be easing up on inflation, it’s likely that long-dated bond yields would rise still further.
And since what the government pays to borrow affects what everyone else has to pay – including on mortgages – an unjustified cut by the Fed would probably be self-defeating. Shortterm rates would go down, but this would be offset by a rise in long-term ones.
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