Guggenheim's Minerd Sees 'Crowding-Out Effect' in Treasuries

The video discusses the US government's increasing issuance of long-term debt and its impact on investment strategies, particularly in fixed income. It highlights the significant rise in debt issuance in the mid-term range and the flattening yield curve. Concerns are raised about the crowding out effect, where large treasury borrowings may hinder other borrowers' access to capital. The video also questions how future deficits and a shrinking Federal Reserve balance sheet will be financed, given the current US savings rate.

What is the significance of the yield curve flattening in the context of US Treasury debt?

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What are the implications of the Federal Reserve shrinking its balance sheet while Treasury debt increases?

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