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.
About the Author
Ernie Tedeschi is an economist and managing director at Evercore ISI.