In the first 1 1 month of this fiscal year, the interest expenditure of the US federal budget decreased by about 10%, and the US is facing the biggest deficit since World War II. According to the data of the CongressionalBudgetOffice, in terms of economic planning, the cost of servicing the principal and interest of US Treasury bonds will be lower in the next few years than at any time in the past half century.

The reason is that the yield of $20 trillion US debt fell to a record low at the beginning of the outbreak, and then only rose slightly. Although the supply of US debt soared to a record high, it did not increase the yield.

The US Congressional Budget Office estimates that the deficit this year is about $3.7 trillion, accounting for 16% of GDP, more than three times that of the same period last year. Bonds issued to make up the deficit have pushed the public debt of the United States to more than 20 trillion dollars, exceeding the annual output of the American economy. However, the average yield of these bonds has dropped from 2.4% in February last year to 1.7%, and will drop further.

Even in the past few bond auctions, the demand is very weak, and the US government can still borrow 30-year loans at an interest rate lower than 1.5%. The U.S. Treasury also tends to sell such long-term bonds because it helps to determine historically low interest rates. It is worth noting that the latest long-term bond auction on Thursday attracted strong buying.

Loans may not always be so cheap, but now the US government is boosting the economy after a wave of business closures and layoffs, which is far from the limit of the US government's financial affordability. However, in recent weeks, with the gradual suspension of economic impact measures, officials from both parties have expressed concern that the United States cannot afford more expenses.

Ed, founder of YardeniResearchInc? EdYardeni shows that:

"Although people have a lot of concerns about the increasing debt, it has not formed the problem expected by doomsayers."

Philip, portfolio manager of 24 property management companies in London? Villaroll showed that the debt burden of the United States is not bad, and certainly not excessive. They will also check the use of government loans. Now, it is generally believed that it is necessary for the government to ask for a loan.

Yadini said that some investors put pressure on the US government by selling government bonds, which made it more expensive for the US government to apply for loans. But now the market is dominated by another force that supports the US government's fake loans-the Federal Reserve.

Since March, the Federal Reserve has bought about $65,438+0.8 trillion in public bonds from shopping malls, while the US Treasury has issued about $3 trillion in new bonds. The Federal Reserve now buys about $80 billion of US Treasury bonds every month. It also promised to keep short-term interest rates at zero in the foreseeable future, tolerate inflation above the target, and urged the government not to relax its financial impact.

Therefore, bond investors generally believe that if the interest rate of long-term government bonds starts to climb, then the Fed will start to intervene.

RichardClarida, vice chairman of the Federal Reserve, hinted at the possibility of adopting yield curve control in a speech on August 3 1, but he also indicated that this policy would not be introduced immediately.

Investors believe that even the hint of the Federal Reserve will help the US government keep the cost of fake loans at a low level.

In the financial world, many people think that the low-interest bill paid by the United States for its increasing debt is just a short-term respite, just like the attractive interest rate of huge mortgage loans.

Gary, head of private wealth fixed income business at Deutsche Bank? GaryPollack shows that the Fed is adding "lubricating oil" to the financial system to ensure the normal work of the financial mall. But at some point, things will change, and the United States may suddenly be trapped by a huge bill.

Those who disagree use Japan as an example to refute. Japan's national debt planning is 2.5 times that of the United States (compared with their economic planning). After more than 20 years of low interest rates, Japan's debt service cost is now almost zero.

DavidLevy, chairman of JeromeLevyForecastingCenterLLC, pointed out that the government debt is limited, but the United States is far from reaching this limit, and there is still room for the United States to borrow money to pull the economy out of the bottom of the epidemic.

He pointed out that it will take a long time to reach the inflation scenario that people think the dollar is worthless.