President Trump: Making America Great Again...

[Moliere]

So Joe, if these are U.S. treasury notes, the higher interest payments are being made by the USG, correct? Doesn't the USG set those rates? So doesn't that mean we are paying more to service our debt? Or is this the rates in a secondary market where these notes are bought and sold? Does that happen with treasury notes?

It’s the latter. Treasury note interest rates are set at auction when the notes are initially sold. The interest rate on that note doesn’t change so as newer notes are sold (at a higher or lower interest rate depending on the market) the fair value (or MTM) of the old notes changes. Say for instance you buy a treasury note that has a 5% interest rate. The next month the government sells similar treasury notes with a 4% interest rate. Your 5% note is worth more because it has a higher yield than the more current notes so you could sell your note for more than its face value.

Prople and companies buy and sell us tressuries all the time. It’s an incredibly liquid market, maybe the most liquid of any stock or bond market.

FYI, the government doesn’t exactly set the treasury note rates. The Fed sets the fed funds rate which is the overnight borrowing rate. Other rates tend to “follow” that trend in rates.

also, we are paying more in interest to service our debt since treasuries issued over the past couple years have higher interest rates. But that’s how this all works and it’s why having this much government debt can be dangerous when the Fed starts increasing its borrowing rates to cool the economy.

[Joe Public]

So Joe, if these are U.S. treasury notes, the higher interest payments are being made by the USG, correct? Doesn't the USG set those rates? So doesn't that mean we are paying more to service our debt? Or is this the rates in a secondary market where these notes are bought and sold? Does that happen with treasury notes?

Yes. The rate the USG will pay on its notes and bonds is set when the debt is initially auctioned, and it stays the same over the life of the note or bond. The rise in interest rates across the yield curve over the last few years means the USG is paying more interest on a given dollar amount of debt than it would have a few years ago. Also, the national debt balance continues to grow, which exacerbates the situation.

US Treasuries do trade on the secondary market. Because the USG pays a fixed amount of interest (ignoring TIPS, FRNs, e.g.) over the life of the debt, post-issuance fluctuations in market interest rates are reflected in the amount of premium or discount at which a Treasury trades on the secondary market.

EDIT: It looks like Moli and I were typing at the same time.

[frank ryan]

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Wait, what about the whole Bill of Rights thing?

People should read up on what Steve Bannon means when he talks about flooding the zone

[falafel]

Wait, what about the whole Bill of Rights thing?

People should read up on what Steve Bannon means when he talks about flooding the zone

The Bill of Rights is for white people.

[Northwestcoug]

This can't be true. I could have sworn he denied saying 'shithole' countries on record. And it was so believable that he would never say anything like that:

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At least now with his open racism tour he can be out and proud.

[frank ryan]

This can't be true. I could have sworn he denied saying 'shithole' countries on record. And it was so believable that he would never say anything like that:

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At least now with his open racism tour he can be out and proud.

Don't be uptight. Presidents say things like that all the time. I think Reagan called the USSR the evil empire so there. Bush call Iran, Iraq, DPRK axis of evil - so there. Completely normal.

[myboynoah]

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[myboynoah]

He keeps taking those cognitive tests. Why?

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[falafel]

He keeps taking those cognitive tests. Why?

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I enjoyed the bit about how he ACED his 3 cognitive exams "in front of large numbers of doctors and experts". That right there tells you everything. Cognitive exams are highly controlled and outsiders and observers are not permitted because they have the ability to influence or corrupt the responses. Neuro-psychologists will refuse to do a cognitive exam if an observer is in the room.

And the only reason to take a cognitive exam is because your cognition is suspect. Obviously.

[myboynoah]

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[myboynoah]

He really doesn't want those Epstein files and that double tap video released.

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[falafel]

He really doesn't want those Epstein files and that double tap video released.

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The Trump WHAT card???

Dude, govern the country! You ass. Or at the very least, deal with your skin cancer and dementia.

[LVAllen]

The Trump WHAT card???

Dude, govern the country! You ass. Or at the very least, deal with your skin cancer and dementia.

The $1 Million Citizenship Card (Immigration The Right Way™).

[myboynoah]

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[frank ryan]

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That sounds fascist. But I'm not allowed to use that word