US mortgage rates hit 8%: Tucker Carlson says US is bankrupt

US homeowners are in trouble as the cost of borrowing surged. Data shows that mortgage rates jumped to 8.09% on Monday, the highest level in more than 23 years. Rates were near zero in the decade following the Global Financial Crisis (GFC).

Federal Reserve rate hikes

The Federal Reserve and the government are to blame for the current state of the economy. Politicians in Washington unleashed unprecedented spending during the pandemic, including stimulus checks. 

This stimulus, together with lockdowns, helped to push inflation to a multi-decade high. At the same time, sanctions on Russia after the Ukraine attack did not help. Today, inflation remains above the Fed’s target of 2.0%. 

The Federal Reserve is also to blame for leaving interest rates at zero for more than a decade. During the pandemic, the bank noted that inflation was transitory in most meetings. Now, after messing up, the bank has hiked rates at the fastest pace in years.

It has pushed rates from almost zero in 2022 to between 5.25% and 5.50%. The dot plot of the last meeting pointed to another 0.25% rate hike later this year. 

Rising interest rates have helped push bond yields to the highest level in more than 2 decades. These rates have also led to higher mortgage rates, which are hurting millions of Americans. Indeed, data shows that a record number of Americans are holding two jobs as the average house payment has surged to a record high of $2,900 per month.

Tucker Carlson warns that US is now bankrupt

Now, Tucker Carlson argues that the US is now bankrupt and that the situation is getting worse. He said this in his X show, in which he also interviewed Vivek Ramaswamy, the GOP presidential candidate. 

Jeffrey Gundlach, the head of Doubleline Capital, a firm with over $50 billion in assets shared this view. In a tweet, he argued that US debt had jumped by more than $500 billion in less than a month at stood at over $33.5 trillion. 

The US’s path to ruin has been characterised by high defense spending and foreign wars. The government has already spent over $115 billion in the war in Ukraine and some politicians want to spend a similar amount this year.

Further, the government is expected to send billions of dollars to Israel as the war with Hamas continues. Looking back, the US spent over $2.3 trillion in its war in Afghanistan and $3 trillion in Iraq. Iraq and Afghanistan are not bastions of peace today.

The US budget deficit has widened to almost $2 trillion while total interest payments on the debt stand at over $807 billion. Therefore, unless the country cuts its spending and raises revenue, it will be difficult for it to prevent a major economic fallout.