From the top down, we as a country are spending more money that we just don’t have. The government and many private companies are issuing additional bonds this week to bring in needed cash to cover expenses. From the looks of it, there are more bonds wanting a buyer than there are buyers wanting a bond. This oversupply softens the price that investors are willing to pay and puts upward pressure on interest rates.
The Federal Reserve Bank of Atlanta says that inflation in the United States bottomed in July at 3.0% and will head higher from these levels. They anticipate the next reading to come in at 3.8%, which is an accelerated increase from last month’s 3.2% to be sure.
Another consideration playing out is the debt ceiling, which will probably be touched in 16 days from now. Our rapid approach to the newly imposed limit manifests that the federal budget is still not in check. In fact, it’s been calculated that federal spending deficit will double by the end of the year.