Good Wednesday AM on this best day of the week,

The data today came in weak as expected, but clearly not as weak as markets had hoped, so we are seeing a bit of a consolidation of yesterday’s gains vs some accelerated buying. I do not see it as problematic, just never a straight line up or down. Rates haven’t moved much since yesterday afternoon mostly because not all of yesterday’s gains were not fully priced into rates sheets.

As the numbers/data were reported today:

• Retail Sales -0.1 vs -0.3
• Ex Autos 0.1 vs 0.0
• PPI MOM -0.5 vs 0.1
• Core PPI 0.0 vs 0.3

Lots of interesting pieces out there to share but none like the below.

Can you imagine 2Trillion of debt service (not loans, this is interest on loans) which will balloon to 3.5T in 2028. It is unstainable. I can assure you, collectively governments will be pushing down interest rates to afford their own debt service or will default. Currently the US debt service at FULL EMPLOYMENT mind you, represents 68% of GDP!!! One commentator on CNBC this a.m. called it ‘ASSANINE’. I agree.

The $2 Trillion Interest Bill That’s Hitting Governments

The world spent the past decade-plus taking advantage of rock-bottom interest rates to binge on debt. An unprecedented bill is coming due. Governments are expected to spend a net $2 trillion paying interest on their debt this year as higher interest rates make borrowing more expensive, up more than 10% from 2022, according to an analysis of International Monetary Fund data by research consulting firm Teal Insights. By 2027, it could top $3 trillion. As debt servicing takes up more revenue, politicians face unpopular decisions to raise taxes, cut spending or keep running deficits that will add to interest costs.

Please remain safe and healthy, make today great!