The United States has never defaulted on its debt. As a result, statements such as this are familiar to investors around the world: “Bonds issued by the U.S. Treasury are backed by the full faith and credit of the U.S. government and therefore considered to have no credit risk.”
The consequences of a government default are harsh. Suddenly the safest investment is precarious. Where would you put your money? Where would pension fund managers put money?
Mortgage rates generally rise and fall along with yields on Treasury securities. What will happen with higher mortgage rates? Interest rates, including the interest …