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Strategies & Market Trends : The Art of Investing

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From: Sun Tzu	8/7/2022 8:12:46 PM
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A little side note on bonds and interest rates: The Federal gov has $30.6T debt Businesses have ~$23+T debt Households have $16.+ T debt State and local govs have $3.3T debt In all you are looking at ~$73+T of debt. Not all of this is variable/float, but I'd guesstimate that $10T - $15T of it is or at least needs to be renewed each year. So for every 1% increase in the interest rates, you are draining ~$120B in interest payments out of the economy. Add a multiplier effect to it and it becomes even more significant. I can't find a study on it, but I suspect the multiplier is somewhere between 5 - 8.

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