“The daily borrowing for the next 90 days… $8.66B a day – a day!”  Next years’ projections are even higher.  “This is driving the yield curve,” says Richard Fisher. Fiscal policy is driving rates higher.

Mr. Fisher doesn’t think there is a clearing mechanism for the market when there is so much borrowing.  As long as the fiscal authorities are out of control, we will live in a 5% world.  “They (the Fed) can work on the short end of the yield curve, but that’s it.”  The Treasury is mostly issuing shorter duration bonds – less than 10 years.  A 5% 10-year bond sends, “a shiver up the spine of the markets,” and he still thinks there is potential upside.

“Over the next 3 years, over half the debt of the Treasury will have to be re-financed.”