All Else Is Not Equal

 Read: https://www.zerohedge.com/markets/deficit-surge-will-lead-lower-rates-not-higher

If all else were equal, then more debt would require higher interest rates. Many “bond bears” suggest that rates must rise as deficits increase and more debt is issued. The theory is that at some point, buyers will require a higher yield to buy more debt from the U.S. Such is perfectly logical in a normally functioning bond market where the only players are the individual and institutional bond market players.  In other words, as long as “all else is equal,” rates should rise in such an environment.

However, All Else Is Not Equal.  What will happen is the Fed will kill the economy by continually raising rates, this will cause a recession and then the Fed will engage in a massive QE bond-buying program of $4 trillion or more to lower the rates.  The Fed has the power to raise rates and lower rates as it has demonstrated and they don't want to kill the golden goose / magical money tree.  So they will lower rates.  And it will end in a frozen wasteland of an enormous amount of unproductive government debt at close to zero interest rates, just like Japan. Given the current push by Central Banks globally to suppress interest rates to keep nascent economic growth going, an eventual zero-yield on U.S. debt is not unrealistic.