How will US Debt 2025 refinance/maturity influence interest rates and inflation?

[AudiDudi]

I've seen CD rates @Schwab rise a couple 10ths in the last couple weeks. I see the US has an unusal amount of debt that needs servicing this year. Will rates go even higher?

"According to @KobeissiLetter, in 2025, $9.2 trillion of US debt will either mature or need to be refinanced, accounting for 25.4% of the total $36.2 trillion US government debt. This significant maturity is a key reason for rising interest rates, as investors anticipate increased borrowing costs and potential shifts in monetary policy."

 

[Koolau]

As you know, inflation "surged" recently which might also cause people to "insist" upon higher interest rates for CD's.

 

[SnowballCamper]

Well in today's treasury auction 103 Billion was tendered with only 41 Billion accepted. It's the first time I've looked at the official auction results. I have no idea what the "normal" difference between tendered and accepted is, but the appetite for treasuries surely exceeded demand today.

I'm not sure why a significant amount maturing would cause rates to rise in a fluid market. I do think interest rates are going higher along with inflation because I think the increase in the money supply from a few years ago has yet to work its way through the market. With the addition of tariffs, and proposals for continued low tax rates, I don't see why interest rates would go down.

 

[AudiDudi]

As you know, inflation "surged" recently which might also cause people to "insist" upon higher interest rates for CD's.

I agree. It looks like a more "normal" rate is aound $2 Tril. I'm wondering what effect the BRICS+ might have on our interest rates as it might limit the number of buyers of our debt unless rates rise. Also it appears some central banks are increasing gold buying and reducing exposure to US debt (China).

 

[AudiDudi]

Well in today's treasury auction 103 Billion was tendered with only 41 Billion accepted. It's the first time I've looked at the official auction results. I have no idea what the "normal" difference between tendered and accepted is, but the appetite for treasuries surely exceeded demand today.

I'm not sure why a significant amount maturing would cause rates to rise in a fluid market. I do think interest rates are going higher along with inflation because I think the increase in the money supply from a few years ago has yet to work its way through the market. With the addition of tariffs, and proposals for continued low tax rates, I don't see why interest rates would go down.

So they had less than a 40% acceptance rate while offering around 10% of what need to be refinanced. Seems the buyer might want a higher rate?

 

[Koolau]

I agree. It looks like a more "normal" rate is aound $2 Tril. I'm wondering what effect the BRICS+ might have on our interest rates as it might limit the number of buyers of our debt unless rates rise. Also it appears some central banks are increasing gold buying and reducing exposure to US debt (China).

Yeah, I'm not educated enough to find info on the effect of the BRICS+ to wrest economic "power" away from USA. I feel certain BRICS+ will continue to cause USA "issues." Having an excellent USA economy will be critical to maintain USA advantage in the world economy IMHO.

Anyone have insight on OUS nations and their central banks buying gold? Is USA following suit or is there a belief that USA doesn't need more gold? (Heh, heh, I have my share, already.)

 

[AudiDudi]

I read where a lot of physical gold recently has left London and traveled to NY.

 

[Koolau]

I read where a lot of physical gold recently has left London and traveled to NY.

I had heard that the "issue" was to avoid any looming tariffs. I have nothing to back that up.

Off topic: Most of us think of Fort Knox as THE place where all the gold is but apparently, the largest gold stash in the world is the Federal Reserve Bank of NYC. I learned that (IIRC) on a Grayline tour of NYC ca 1978.

MUCH of the gold deposited there does not belong to the USA but to other countries. Apparently, there is a shaky agreement that gold owned by other countries will be returned upon request - but just not how quickly it will be retuned. SWAG: When a country "demands" return of a 10,000 ozt, they might get 2000 ozt, this year. NEXT year, a new gummint might decide they don't actually want the remainder of the transfer and just leave it where it is.

I understand that the gold is several stories below ground level at the FED NYC. I'm sure it's all very well guarded but how much gold does anyone think they could steal and carry up several flights of stairs? (First obvious move in the event of a security breach would be locking out all the elevators.). I recall in the movie "Goldfinger" Bond discussing the logistics of looting Fort Knox. He mentioned the hundreds of trucks and time it would take to steal the gold.

Interesting stuff - or not, so returning you now...

 

[rembrandt]

I had heard that the "issue" was to avoid any looming tariffs. I have nothing to back that up.

Off topic: Most of us think of Fort Knox as THE place where all the gold is but apparently, the largest gold stash in the world is the Federal Reserve Bank of NYC. I learned that (IIRC) on a Grayline tour of NYC ca 1978.

MUCH of the gold deposited there does not belong to the USA but to other countries. Apparently, there is a shaky agreement that gold owned by other countries will be returned upon request - but just not how quickly it will be retuned. SWAG: When a country "demands" return of a 10,000 ozt, they might get 2000 ozt, this year. NEXT year, a new gummint might decide they don't actually want the remainder of the transfer and just leave it where it is.

I understand that the gold is several stories below ground level at the FED NYC. I'm sure it's all very well guarded but how much gold does anyone think they could steal and carry up several flights of stairs? (First obvious move in the event of a security breach would be locking out all the elevators.). I recall in the movie "Goldfinger" Bond discussing the logistics of looting Fort Knox. He mentioned the hundreds of trucks and time it would take to steal the gold.

Interesting stuff - or not, so returning you now...

 

[Flieger]

I had heard that the "issue" was to avoid any looming tariffs. I have nothing to back that up.

Off topic: Most of us think of Fort Knox as THE place where all the gold is but apparently, the largest gold stash in the world is the Federal Reserve Bank of NYC. I learned that (IIRC) on a Grayline tour of NYC ca 1978.

MUCH of the gold deposited there does not belong to the USA but to other countries. Apparently, there is a shaky agreement that gold owned by other countries will be returned upon request - but just not how quickly it will be retuned. SWAG: When a country "demands" return of a 10,000 ozt, they might get 2000 ozt, this year. NEXT year, a new gummint might decide they don't actually want the remainder of the transfer and just leave it where it is.

I understand that the gold is several stories below ground level at the FED NYC. I'm sure it's all very well guarded but how much gold does anyone think they could steal and carry up several flights of stairs? (First obvious move in the event of a security breach would be locking out all the elevators.). I recall in the movie "Goldfinger" Bond discussing the logistics of looting Fort Knox. He mentioned the hundreds of trucks and time it would take to steal the gold.

Interesting stuff - or not, so returning you now...

I'd just put a couple bars in my pocket....

Flieger

 

[AudiDudi]

I'd just put a couple bars in my pocket....

Flieger

So you are the one with the deep pockets

 

[engineernerd]

So they had less than a 40% acceptance rate while offering around 10% of what need to be refinanced. Seems the buyer might want a higher rate?

They accepted 40% of the "competitive" bids, and rejected the rest as offering to accept the debt at too high an interest rate. Competitive bidders state at what interest rate they are willing to buy.

Interesting to me that Indirect Bidders had the highest acceptance rate (meaning the most attractive interest-rate bids), not sure if that's normal or not.

 

[SnowballCamper]

They accepted 40% of the "competitive" bids, and rejected the rest as offering to accept the debt at too high an interest rate. Competitive bidders state at what interest rate they are willing to buy.

Interesting to me that Indirect Bidders had the highest acceptance rate (meaning the most attractive interest-rate bids), not sure if that's normal or not.

I think it's usual for the indirect bidders to have a high acceptance rate... see U.S. Treasury Auctions: Navigating 2023's Frenzy

 

[frank05]

I had heard that the "issue" was to avoid any looming tariffs. I have nothing to back that up.

Off topic: Most of us think of Fort Knox as THE place where all the gold is but apparently, the largest gold stash in the world is the Federal Reserve Bank of NYC. I learned that (IIRC) on a Grayline tour of NYC ca 1978.

MUCH of the gold deposited there does not belong to the USA but to other countries. Apparently, there is a shaky agreement that gold owned by other countries will be returned upon request - but just not how quickly it will be retuned. SWAG: When a country "demands" return of a 10,000 ozt, they might get 2000 ozt, this year. NEXT year, a new gummint might decide they don't actually want the remainder of the transfer and just leave it where it is.

I understand that the gold is several stories below ground level at the FED NYC. I'm sure it's all very well guarded but how much gold does anyone think they could steal and carry up several flights of stairs? (First obvious move in the event of a security breach would be locking out all the elevators.). I recall in the movie "Goldfinger" Bond discussing the logistics of looting Fort Knox. He mentioned the hundreds of trucks and time it would take to steal the gold.

Interesting stuff - or not, so returning you now...

You should watch Die Hard with a Vengeance.

 

[Koolau]

I'd just put a couple bars in my pocket....

Flieger

I would need a better belt!

 

[Koolau]

You should watch Die Hard with a Vengeance.

I did. Not sure that's a particularly accurate portrayal but who doesn't love John McClane.