Ernie Tedeschi
Deficits are Raising Interest Rates. But Other Factors are Lowering Them.
Medium, 2019
What's inside?
Paradoxically, US interest rates in 2019 remain at historic lows, despite massive fiscal debt.
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Most financial experts stand by the traditional thinking that large deficits and high levels of fiscal debt raise interest rates. But the US national debt, as a percentage of GDP, ballooned from approximately 33% in 2001 to a 2019 level of 76%, while interest rates in March 2001 were more than two percentage points higher than in March 2019. In this cogent analysis for policy professionals, economist Ernie Tedeschi takes a deep dive beneath the surface of a complex dynamic.
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About the Author
Ernie Tedeschi is an economist and managing director at Evercore ISI.
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