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New Podcast: Contrarian Corner – US $30 Trillion Debt and Higher Rates – Hedge Buying at Highs

By Jillian Baker

Jay Pestrichelli, CEO ZEGA Financial, is back with Derek Moore to say congratulations to our government debt reaching $30 Trillion! What are the ramifications of high debt levels? What the interest on that debt could be if rates rise? Does this put pressure on the Fed NOT to raise rates so much? Plus, interest in hedging at the highest levels since April of 2020. Is that a sign of contrarian optimism for the stock market? And contrarian corner is back where we each give some contrarian picks that go against the grain.

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Topics Covered Included:

  • US Debt – debt held by the public vs. overall debt
  • How much of the budget do net interest payments make up?
  • Average interest rate US pays on Treasury bonds
  • Effect of rise of 1% in rates to interest payments on debt
  • Political pressure to keep rates down?
  • Treasury bonds do not have call provisions
  • Investors are buying put options
  • Hedging appetite highest since April of 2020
  • Contrarian Trades Emerging Market Value – Betting Against Too Many Rate Hikes

Mentioned in this Episode: 

Derek Moore’s Book Broken Pie Chart 

 Jay Pestrichelli Book Buy and Hedge 

 Average maturity of US Treasury debt 

 Average interest rate on US Treasuries 

 Marcel Benjamin explains how TIPS bonds work  

JP Morgan Guide to the markets 

Fed Rate Probability Tool