Staggering amount of US treasuries dumped as Trump salivates over Greenland

[paleotn]

15. Not directly, but it still ain't good for any of us.

It's a bit unintuitive, but generally yields (interest rates) on debt rise and fall inversely to demand. Dumping creates an oversupply of US Treasury debt for sale in the market. Like any oversupply situation, the price buyers are willing to pay for that debt drops since there's so much of it for sale. The unintuitive part is... actual interest rate on that debt increase....

....If I can buy a $100 treasury note paying 5% interest for say $80 because there's an oversupply in the market from dumping, I'm still getting a $5 check from the Treasury as interest payment ...$100 X 5%...no matter what I actually paid for the note. But I only paid $80 for it, so really I'm getting 6.25% instead of the 5% face rate. $5 divided by the $80 I paid. That's the actual market yield.

If you're not trading government debt, that might not mean much. But here's the rub. Those market yields on US debt are tied to interest rates on consumer loans. Yields on 5 and 10 year US notes are usually the benchmark banks and other lenders use to rate car loans, mortgages, student loans, etc. If US debt yields rise, so does the interest on a new car loan. Or a new house.

In short, Donnie shouldn't worry about Jerome Powell and the Fed right now. He's single handedly jacked up interest rates for every American. Good job, Donnie, you fucking idiot!