Elmendorf believes this could in the future trigger a “fiscal crisis,” at which point “interest rates would spike upward.” However, he told Newsweek that this does not appear imminent, given interest rates on federal borrowing are similar to 2007 and that demand for federal debt “has apparently increased as much as supply.” “Will that continue indefinitely given current policies? No,” he said. “When will it stop continuing? Economists don’t know.”
