The 17-week Bill Auctioned at 5.442%

Last week, the investment rate on the 17-week was 5.274%. That’s an increase of nearly 17 bps and not insignifcant. For sure, the debt ceiling will be raised. But that won’t mean the end of economic troubles for the US, because interest rates are the cost of money, and with the US allowing itself to borrow more, the cost of servicing that debt will increase even if interest rates back off, which they won’t, because the Fed isn’t in control. The bond market is, and the cost of serving the US debt tagged $475 billion recently --if I’m remembering right-- whch is a huge fraction of tax revenues, which are in decline.

What this means for prices in the equity casinos is obvious. So plan accordingly.

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