Low Rates Bring Opportunity And Danger to States

摘要

It's no secret that U.S. infrastructure is in 1 dire need of an overhaul. The American Society of Civil Engineers estimates a lack of investment will cost almost $4 trillion in gross domestic product by 2025. Measured per household, that's a loss of $3,400 a year thanks to congested roads, overworked electric grids, and other deficiencies.With that in mind, the global trend of debt yields falling below zero seems like a massive windfall for U.S. states and cities. After all, they borrow for public works projects in the $3.8 trillion municipal bond market, where rates are within spitting distance of all-time lows. Just about every state can borrow at less than 2% for 10 years-a better rate than the federal government can get. If U.S. Treasury yields drop to zero, as some prognos-ticators expect, it stands to reason that those for Florida, Maryland, and Texas will go down, too.