The US is borrowing too much money and that's what is keeping rates up, the ex-Dallas Fed Chair says.
AdvertisementAdvertisementThe higher for longer outlook for interest rates sparked a historic crash in Treasury bonds this month, but there's another factor that's set to keep yields higher going forward, and that's US fiscal policy.
According to former Dallas Federal Reserve President Richard Fisher, massive government borrowing needed to fund massive spending will be a culprit of higher bond yields.
"I believe what's driving rates higher and what will keep them higher for longer is our fiscal policy," Fisher told CNBC on Tuesday.
Compounding the issue of soaring debt is rising interest rates, as borrowing costs rocket higher amid the Federal Reserve's fight against inflation.
Persons:
Fisher, —, Richard Fisher, Rowe Price's
Organizations:
Dallas Fed, Service, Dallas Federal, CNBC, Treasury
Locations:
Europe