Net treasury borrowing and interest-rate changes

Recent evidence on the impact of government budget deficits on the ex ante real interest rate yield on Moody’s Baa-rated corporate bonds

“…Thus, it appears that after allowing for a variety of other factors, the higher the federal budget deficit (as a percent of GDP) the higher the ex ante real interest rate yield on Baa-rated corporate bonds. This finding is consistent with a variety of empirical studies of earlier periods, including Al-Saji (1992, 1993, Barth et al (1984Barth et al ( , 1985Barth et al ( , 1988, Barth et al (1989), Cebula (1988Cebula ( , 1997, Cebula and Belton (1993), Findlay (1990), Gissey (1999), Hoelscher (1986), Johnson (1992), Saltz (1998), Tanzi (1985), and Zahid (1988).…”

Impact of Federal Government Budget Deficits on the Longer Term Real Interest Rate in the U.S.: Evidence Using Annual and Quarterly Data, 1960–2013

“…Thus, the higher the federal budget deficit (as a percent of GDP), the higher the ex post real interest rate yield on ten year Treasury notes. This finding is in principle consistent with a variety of empirical studies of the U.S. involving earlier and shorter time periods, including Al-Saji (1993), Barth, Iden and Russek (1984, 1985, Cebula (1997Cebula ( , 2005Cebula ( , 2013, Cebula and Cuellar (2010), Findlay (1990), Gissey (1999), Hoelscher (1986), Kiani (2009), andSaltz (1998), among others.…”

Recent Evidence on the Impact of Federal Government Budget Deficits on the Nominal Long Term Mortgage Interest Rate in the U.S

“…Thus, it appears that after allowing for a variety of other factors, the higher the federal budget deficit (as a percent of GDP) the higher has been the nominal interest rate yield on 30 year fixed-rate home mortgages. This finding is consistent with a variety of empirical studies of earlier periods, including Al-Saji (1992, 1993, Barth, Iden and Russek (1984, Barth, Iden, Russek, and Wohar(1989), Cebula (1988Cebula ( , 1997, Cebula and Belton (1993), Cebula and Cueller (2010), Findlay (1990), Gissey (1999), Hoelscher (1986), Johnson (1992), Cebula & Saltz (1998), Tanzi (1985), and Zahid (1988).…”