ERROL BARNETT:
00:02:04
And so what, then, is the impact, as finances get in order, for the general public? Should people be worried about how much it will cost them to borrow? Well, they should absolutely care, because this is the bond market's version of for whom the bell tolls. And right now, it's tolling for our mortgages, our credit cards, our auto loans, and every other borrowing cost that makes life more expensive. So higher Treasury yields have this tendency of pushing up all the other costs across the economy. It's already pushed the 30-year fixed mortgage rate to 6.75. So, basically, when Uncle Sam's borrowing costs rise, ours are sure to follow. And so, then, it's even more important for viewers to understand the administration's strategy. The Treasury Secretary says he'll double debt buybacks, but market reaction wasn't as excited as I guess he thought it would be. So are investors confident in the administration's plan? Right. So the Treasury Secretary suggests the trillion dollars that we owe in debt is not a magic number. In his words, we can grow our way out of it. The bond markets aren't reflecting fundamentals, but the market's reaction shows investors vigorously disagree. And they're willing to test the government's resolve and go the Treasury into putting money where its mouth is. They've got a lot of different tools at their disposal that they can use to do it, but these are short-term fixes. The real solution here is the simplest one that, unfortunately, is going to be the most impossible to implement, which is getting government spending under control in a way that brings it in line with tax revenues and, once and for all, kind of takes the pressure off long-term yields.
ERROL BARNETT:
00:03:36
All right, Javier David joining us from Dallas. Appreciate your insight, Javier. Thank you.
