Macro Musings with David Beckworth Samim Ghamami on the Treasury Markets Impact on the Future Path of Interest Rates and Inflation
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Sep 15, 2025 In this discussion, guest Samim Ghamami, a former SEC economist, dives deep into the U.S. fiscal trajectory and its implications for interest rates and inflation. He highlights how rising public debt and demographic shifts challenge financial stability. Ghamami also explores how trade wars and corporate investment strategies affect long-term interest rates. The conversation wraps up with proposed Treasury market reforms and the critical need for a balanced budget to ensure economic resilience.
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Debt And Demographics Raise Long-Term Rates
- Rising public debt and persistent deficits are pushing long-term real rates higher in the U.S.
- Demographics and falling household saving further reinforce upward pressure on yields.
A New Normal For Treasury Yields
- Expect long-term real rates to settle above pre-2020 lows, roughly 1–1.5% real and 3.5%+ nominal for 10–30 year Treasuries.
- Corporate investment behavior remains the key uncertainty that could push rates even higher.
Surprise At Modest Yield Reaction
- Samim expresses surprise yields haven't risen more given fiscal pressure and debt trajectory.
- He notes present yields align with a 1–1.5% R-star and near-2% inflation, explaining current levels.
