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U.S. Treasury Market Crisis: America’s Interest Rates to Soar
The U.S. Treasury market is currently facing a crisis that could have far-reaching implications for the American economy. The market, which is a crucial component of the global financial system, is showing signs of strain as demand for U.S. government debt continues to outstrip supply. This imbalance has already caused interest rates to rise, and experts warn that they could soar even higher in the near future if the situation is not addressed.
The U.S. Treasury market is where the government issues debt in the form of Treasury bonds, notes, and bills to finance its operations. These instruments are considered among the safest investments in the world, and they play a critical role in the global financial system. Investors and institutions around the world rely on U.S. Treasury securities as a safe haven for their funds, and they are also used as a benchmark for interest rates in many financial markets.
However, the traditional balance of supply and demand in the Treasury market has been disrupted in recent years. The U.S. government has been running large budget deficits, which has led to an increase in the supply of Treasury securities. At the same time, the Federal Reserve has been purchasing large quantities of these securities as part of its efforts to support the economy and keep interest rates low. As a result, the supply of Treasury securities has not kept pace with the growing demand, leading to a shortage of available securities in the market.
This imbalance has caused interest rates on U.S. government debt to rise. The yield on the 10-year Treasury note, a key benchmark for borrowing costs, has climbed significantly in recent months, reaching its highest level in over a year. This has raised concerns about the potential impact on the economy, as higher interest rates can increase the cost of borrowing for businesses and consumers, potentially slowing economic growth.
Moreover, the Treasury market crisis has the potential to have broader implications for the global financial system. U.S. Treasury securities are considered a cornerstone of the global financial system, and any disruption in their availability could have ripple effects around the world. As demand for these securities outstrips supply, it could lead to increased volatility in financial markets, higher borrowing costs for governments and businesses, and a potential tightening of financial conditions worldwide.
To address the Treasury market crisis, the U.S. government will need to take action to increase the supply of Treasury securities. This could involve reducing the budget deficit, issuing more debt, or changing the Federal Reserve’s policies with regard to its purchases of Treasury securities. In addition, policymakers will need to closely monitor the situation and be prepared to take further action if necessary to prevent a further escalation of the crisis.
In conclusion, the U.S. Treasury market is currently facing a crisis that has the potential to have significant implications for the American economy and the global financial system. The imbalance between supply and demand for Treasury securities has already caused interest rates to rise, and experts warn that they could soar even higher if the situation is not addressed. It is crucial for policymakers to take action to increase the supply of Treasury securities and prevent further escalation of the crisis. Failure to do so could lead to higher borrowing costs, increased volatility in financial markets, and potential harm to the broader economy.
Every day we have a new problem. It's the new normal. At first we thought it was a crisis, now we know it's a new normal and we have to adapt. this year will be a year of severe economic pain all over the nation.. what steps can we take to generate more income during quantitative adjustment?I can't afford my hard-earned $180,000 savings to turn to dust
Treasury yields and other safe cash-like investments are raising high returns, yet most investors believe this is a good time to buy stocks than gold despite crash. I'd love to spread across $400k into profit yielding dividend equities and end the year well, but unsure of which to get acquire.
This administration has putting so many families into difficult situations, I pray for our country,
It's quite simple why rates are climbing with rising imports and falling exports, the FED is obviously to be blamed for banking crisis. Something will eventually break if they keep the quantitative tightening and higher interest rates. Is this really a good time to have some savings in stocks?
After a massive rally in stocks came and yields collapsed, bond yields and the major averages are higher on Wednesday. How do we deal with such market conditions? Typically my $2m worth of holdings go up 8% then lose 20% right after and the cycle continues.
Hey I'm here
Remember the FED is not actually a Gubiment agency. They are group of bankers that, at the end of the day are going to take care of themselves first. Buy Bubiment debt maybe at the right price……
A number of the most eminent market experts have been expressing their views on the severity of the impending economic downturn and the extent to which equities might plummet. This is because the economy is heading towards a recession and inflation is persistently above the Federal Reserve's 2% target. As I'm aiming to create a portfolio worth no less than $850,000 before I turn 60, I would appreciate any advice on potential investments.
So funny that even in the face of the negative effects of inflation, people are still waiting to use it to “buy the dip.” Broski, prices are not coming down. Ever. You are all conditioned to BUY, everything. The Fed needs to raise interest rates to the point you don’t want to do anything but buy a T bill or save your money in a savings account. Typically, this is impossible and instead prices spiral upwards as the govt. Tries desperately to catch up with interest rate hikes. This will continue until a Fed Chair comes along and increases rates to say 20% in one whack. Enjoy. By the time we are done there will be national rent control; sky high property taxes; and likely limits on corporate ownership of real estate. Imo.
Realtors to take the dump!
As an elder millennial, one of the few advantages is having lived through the Great Recession. My advice. Reduce unnecessary expenses, increase your savings by investing in financial markets and do not sell. One thing I know for sure is that diversifying your income can help insulate you from much of the craziness going on in the world
Take the rates to 10 or 12 percent and leave them there. IT WORKED GREAT IN THE 80S
I said they would take rates above 10% and will cap near 17-20% back in 2020. But, noooooooooo… you all want to be in this fairytale world where none of this is happening.
The money printing machine creating the biggest Buble to ever exist
More money equates to more guilt come judgement day, more money proves collaboration with and contribution to God's enemies. Support for God's enemies makes you God's enemy. Poverty or damnation choose your fate.
May sound crazy but I’m beginning to see the resurgence of the barter system…for the higher percentage of the citizens in this country the value is going to shift to possesssd goods and their value vs. monetary value. What will be interesting is to see how they combat that type of transaction being they can’t control the exchange monetarily…
John, The reason you don't see that the inflation rate has gone down is because it is 3.7% higher than the already increased. 9.1% from the previous year. It didn't go down to 3.7% from before it already had gone up. 9.1%. It is a continuation. It is exponential. So, if it goes up 9.1% one year, and then the following year, it's 3.7%. That doesn't mean it went down to the baseline. And then up 3.7%. It's already increased the 9.1% from the year before. And then it's 3.7%increased above that already increased inflation new baseline..
I think the entire neoliberal order is going to collapse into sovereignty. I understand that they're pushing the world economic Forum agenda and all that and that this leads towards that but if we see what happened with COVID I think this is going to paralyze people away from accepting anything neoliberal into sovereign independence having the opposite effect that these people ultimately want.
It boggles my mind that Janet Yellen didn’t refinance government debt when rates were so low.
Why do we need a central bank when the US government can just issue it's own currency?
Interest rates are not soaring in Norway. There is, after all, a world outside of the USA. This comment is not directed at you, John. Thanks for the video.
VRAU.bani.mej.ches.990.billion./£/DATA.13
Nov.2023.
I honestly think that the only wat they think they xan curb inflation is to make everyone poorer.
The whole western world is built on debt. Raising interest rates just means more people have to pay more of their income onto debt payment instead of necessities.
But unfortunately for the average joe, this means that the banks are getting richer.
But while the banks are profiting, the consumer society will collapse, which is a good thing in my opinion, due to less money being spent on anything else.
Small businesses, that depend on ease of credit will start to collapse ss borrowing costs will become out of reach for them.
I truly believe this is end srage Capitalism we are witnessing in front of our eyes.
Our governments have put us in a situation where there is no goung vack to normal.
Literally, everything they do will benefit the richest people in our society and leave more and more by the curbside.
Its almost as if the system was designed this way.
I agree – no Fed pivot anytime soon. The stock market is running up on fake news. Great videos, John!
I wonder why interest rate hikes are not fixing inflation??
Maybe because the real reason for the inflation is greedy corporations raising prices to bake more mobey and give their shareholders an ever growing dovidend year on year.
You cant fix the system when it is the system that is at fault.
Calm down, people! Bidenomics works out better for everyone. It doesn't matter how much the interest rate is going to go to the roof, you'll definitely be able to pay it all up because your income will be getting higher too! Why? Bidenomics will solve everything before you know it! Put all the trust in your efficient,reliable and dependable Democrat's administration. They're far better than the misogynistic white christian GOP! Biden's administration can even take care of the affairs of foreign countries. We can simply waste $100 billion in Ukraine and a further $100 billion hegemony package on Ukraine and Israel. America certainly has the money to fund terrorism and invasion around the world!
I think it’s those massive layoffs keeping them from raising the rates
Prices will never come down. Deflation is an anathema to the FED and Big Banks because of collateral erosion. The FED must inflate, THEY are determined to destroy you financially and control you through CBDC. We must not allow this to happen during the next fabricated crisis.
We are in a new cycle, interest rates wont go back down for another 40 years and alot is going to change in that time.
My educated guess is that by 2030-2032 interest rates will be 15%+ give or take 1%.
The boomers are getting ready to sell their nest eggs in mass and there are to many who cant afford the prices let alone the interest rates.
If you want to control where people live its as easy as making it so the group that owns around 75% of all available housing refuses to sell because its not worth it.
Not saying thats whats happening but with costs in rural areas outpacing cities by miles its looking like they want us in the cities.
The coming banking collapse is inten tion al. This will usher in CBDC's.
Treasury yields and other safe cash-like investments are raising high returns, yet most investors believe this is a good time to buy stocks than gold despite crash. I'd love to spread across $400k into profit yielding dividend equities and end the year well, but unsure of which to get acquire.
What is your position for gold?
Well I fr one would LOVE rates to go higher ( 17.5% would be nice like i was paying on my mortgage back in the day ) now that I have savings but I suspect we are seeing the peak already, best I can hope for is rates stay at 5 to 6% and inflation drops to reasonable levels and things just bumble along ok ish.]
Hedge your bets and just but 50/50 stocks bonds and wait it out.
It’s not just Argentina anymore.
They could close all crypto and invest the money in anything that produces food or goods
Our politicians are set up to get rich but they dont care about the country so its going to sink as the warpigs get rich
If we get the real estate meltdown that you are predicting, interest rates will be lowered to support the economy. Wouldn't you think that bond holders will be likewise rewarded?
Green projects require most the investment up-front. At even five per cent interest rates, no one will risk the kind of money required.
Thanks dude!! for keeping us financially Educated! Regardless of how Bad it gets or the economy, I still make over $22,000 every single week
The Gurion canal
Oh just stop…..