The Top 10 Items Shaping Interest Rates in 2010 — Forbes

Government deficits. Foreign sovereign and U.S. federal, state and local deficits should be both sweet and sour for debt markets this year. The liquidity created by all the extra issuance should hit the sweet spot. But if the U.S. and global economies take too long to recover, then governments will face some sour choices: higher taxes, fewer programs, more debt or–a last resort–default. Prediction: issuance and credit concerns should help drive up interest rates in longer-maturity government debt.

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