What I am wondering is what will be the consequence of current huge money printing and borrowing? Why the market doesn't demand higher long term interest rate due to inflation worry?
That's a great question. We're in a deflationary period. My guess is stagflation. Dow 100k with avg employees paid 10% less
Because they just kick the can down the road again. At some point, no-one knows when, the shit will hit the fan
Honestly with the $ so strong and us controlling the printing press with strong $'s no consequences at this time . Interest rates at or near zero so very little to pay back on interest only . The consequences are down the line if people get scared of all the debt and depend higher and higher rates for the risk and that happens if the $ declines big. Then it shows up in $6 milk and $12 for a meal at mcdonalds . But on the other side asset prices will rise to dry to outrun the rise in prices causing a vicious spiral up of all prices . But 10's of millions more people will slip into poverty as their wage increases don't keep up with rising prices . At that pt due to inflation the fed will have no juice but to jack rates up big to help the collapsing $. But until that to its party on .
This article can shed some light on the issue. I didn't see it when I started the thread. https://www.marketwatch.com/story/c...s-for-the-us-economy-2020-05-19?mod=home-page