A Peek Around the Corner… Maybe

We have consistently struggled in our efforts to forecast interest rates. We have watched as the U.S. Federal debt has moved from $9.7 trillion and 62% of U.S. GDP to $22.7 trillion and 106% of U.S. GDP in 2019. The estimate for 2021 debt outstanding is $26.7 trillion and 136% of GDP. We assumed that with the significantly higher supply of debt that the cost of financing the debt would begin to increase – that has certainly not been the case thus far. Unemployment in the U.S. fell from a high of just over 10% in 2008 to a low of 3.5% in February 2020 – it now stands at 10.2%. We anticipated that lower unemployment numbers would lead to higher wages and in turn start to move the needle up

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