{"id":233282,"date":"2021-04-22T19:54:00","date_gmt":"2021-04-22T16:54:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/u-s-mounting-debt-load-caps-room-for-fed-interest-rate-rises-says-analyst\/"},"modified":"2021-04-22T19:54:00","modified_gmt":"2021-04-22T16:54:00","slug":"u-s-mounting-debt-load-caps-room-for-fed-interest-rate-rises-says-analyst","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/u-s-mounting-debt-load-caps-room-for-fed-interest-rate-rises-says-analyst\/","title":{"rendered":"#\n  U.S. mounting debt load caps room for Fed interest rate rises, says analyst"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_89 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6af6d967c93f3\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6af6d967c93f3\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/u-s-mounting-debt-load-caps-room-for-fed-interest-rate-rises-says-analyst\/#US_non-financial_debt_to_GDP_has_more_than_doubled_over_the_last_three_decades\" >U.S. non-financial debt to GDP has more than doubled over the last three decades<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/u-s-mounting-debt-load-caps-room-for-fed-interest-rate-rises-says-analyst\/#Sunny_Oh\" >Sunny Oh<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#<br \/>\n  U.S. mounting debt load caps room for Fed interest rate rises, says analyst<br \/>\n<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"US_non-financial_debt_to_GDP_has_more_than_doubled_over_the_last_three_decades\"><\/span>\n  U.S. non-financial debt to GDP has more than doubled over the last three decades<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div class=\"cx--next\">\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000241800\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       The U.S.\u2019s mounting debt load may warrant investors rethinking their expectations for a liftoff from the Federal Reserve\u2019s easy monetary policy. <\/p>\n<p> Bondholders took deep losses this year as yields rose amid worries that the Fed may be forced to raise its policy interest rates earlier than it planned, if the economic recovery resulted in rising inflation.  <\/p>\n<div class=\"paywall\">\n       But Kit Juckes, a London-based strategist at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale warns the U.S.\u2019s indebtedness may mean tighter monetary policy could prove more punishing to the economy, creating a ceiling on how high interest rates can rise. <\/p>\n<p>He noted the share of U.S. non-financial sector debt to GDP had risen to 280% this year from 130% in 1981. <\/p>\n<p>The nonpartisan <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cbo.gov\/publication\/56977#:~:text=By%20the%20end%20of%202021,percent%20of%20GDP%20by%202051.\" class=\"icon none\">Congressional Budget Office <\/a>has also noted that during 2020 the U.S. government debt held by the public rose to 100% of GDP for the first time since the end of the Second World War.\u00a0<\/p>\n<p>That rise has been accompanied by a steady decline in inflation-adjusted yields, or real yields, considered a proxy for the true borrowing cost to the U.S. government and an indicator of investors\u2019 expectation for U.S. growth. <\/p>\n<p><strong>See<\/strong>: Summers says Fed should express more concern over inflation outlook<\/p>\n<p>The 10-year Treasury note yield BX:TMUBMUSD10Y was at 1.58% on Thursday, but the inflation-adjusted rate <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.treasury.gov\/resource-center\/data-chart-center\/interest-rates\/Pages\/TextView.aspx?data=realyield\" class=\"icon none\">was still deeply negative at -0.76%<\/a> on Wednesday.<\/p>\n<p>If real rates rise again as the Fed pulls back its accommodative monetary policy, the pain threshold to businesses and households could show up earlier than expected.<\/p>\n<p>\u201cWhether the real rate peak this time is higher than the last, or not, it seems to me that any given peak level of real rates would hurt the economy more this time around. And this is where the consensus bearish view of bond markets needs to be questioned,\u201d said Juckes.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>His argument that more debt could translate into lower interest rates goes against the theory that so-called bond vigilantes would rebel against a country\u2019s fiscal profligacy and sell their bonds, pushing yields higher. <\/p>\n<p>But a growing camp of investors have suggested more debt can be, in fact, deflationary as more of it is funneled to unproductive uses. That, in turn, could lower the long-term trajectory of interest rates.<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Sunny Oh\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Sunny_Oh\"><\/span>Sunny Oh<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B21005575-02D4-D4B5-4572-D3B088D122F0%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# U.S. mounting debt load caps room for Fed interest rate rises, says analyst &#8221; U.S. non-financial debt to GDP has more than doubled over the last three decades The U.S.\u2019s mounting debt load may warrant investors rethinking their expectations for a liftoff from the Federal Reserve\u2019s easy monetary policy. Bondholders took deep losses this&#8230;<\/p>\n","protected":false},"author":1,"featured_media":233283,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-233282","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/233282","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=233282"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/233282\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/233283"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=233282"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=233282"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=233282"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}