From Cynthia Scott of OMC Financial Services:
Why raising the debt limit may be negative for interest rates and the economy.
**The U.S. is already 93% in debt of its GDP (gross domestic products)
**Foreigners already own a great deal of U.S. debt and may demand higher interest rates to be induced to our bonds
**Europe is heavily in debt and already has had to buy Greece’s and Spain’s debt and cannot be buyers of U.S. debt
**Our Federal Reserve already owns a great deal of Treasury debt and probably won’t want to take on more
**Higher interest will trickle down to consumers:
*Bank’s would pay higher interest rates on saving accounts and CD’s
*Mortgage rates would rise
*Rates would rise for purchases such as auto’s
*Lending rates would rise for business and personal loans
