Andrei Jikh: Interest rates will rise

The window it was checked over

Federal funds target range, upper limit: Federal Reserve Board via FRED, figures as first published. The shaded span is the window the call was checked over; grey bands are recessions.

What was said around it

Treasuries. They have to sell them. And that's already happening. Foreign central bank holdings of US Treasuries at the New York Fed just went down to the lowest level since 2012. In 4 weeks, tens of billions of dollars are gone. And that's just the beginning because it'll probably get worse. Why is it going to get worse? It's going to get worse because when countries sell Treasuries, Treasury yields go up. And when yields go up, the cost of financing America's almost 40 trillion dollar debt goes up as well. Now, the most important bond to look at right now is the 10-year Treasury and its yield, which was in the threes when this war started, but it went up in the last 4 weeks. Now, the question is, is there a point at which bond yields hitting a certain level breaks the economy? Like how high does this number have to go for things to start to get really bad for everyone in the US economy? And according to the best research I was able to find, the danger zone is somewhere between 4.6 and 4.8%. And once we get there, we could enter into what they call a debt death spiral. What does that mean? It means the more expensive it is to borrow, the bigger the deficit. Bigger deficits mean more

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