Business, Economics and Jobs

Macro chatter: US considers issuing floating rate debt


Hyundai vehicles are parked on the sales lot at Rick Case Plantation Hyundai on April 3, 2012 in Plantation, Florida.


Joe Raedle

Need to know:
While many Americans are trying to lock-in near record low interest rates, the US government is considering financing itself with floating-rate debt, the Wall Street Journal reported.

The rate of interest paid to investors would vary instead of being fixed as it now is. The change would mean fewer potentially stressful auctions for the US Treasury but could bring higher borrowing costs as interest rates rise.

The WSJ said the government may not be as susceptible to rate spikes as it may initially seem because the notes would mature within a maximum two years.

The U.K. and Italy already sell floating-rate government debt.

Want to know:
Unemployment around the world is expected to reach 212 million this year, and government budget cuts have only worsened the world’s labor situation, according to the latest report from the UN's International Labor Organization.

The ILO said fiscal austerity hasn’t been able to keep unemployment from rising to “alarming” levels and has choked off access to money small businesses need to expand and hire new workers.

The report is a little more meaningful after Monday’s news that Spain slid into a double-dip recession and ahead of anti-austerity protests and elections scheduled across Europe this week.

Dull but important:
It’s another busy day for Fed watchers looking for clues on interest rates and the potential for more central bank bond buying. Five Federal Reserve policymakers are scheduled to speak today, and if Monday was any guide it could get interesting.

The Fed’s split as to exactly when it needs to raise interest rates, and there’s still talk of the potential for more quantitative easing.

Dallas Fed President Richard Fisher put his foot down about that on Monday, saying doing more to stimulate US economic growth would be like giving Congress cookies despite their fiscal malfeasance.

"We have children in Congress," Reuters quoted him as saying. "They need to be disciplined.

Just because:
Expect more stellar reports from automakers about April sales this afternoon.

Chrysler already said this morning that its sales were up 20 percent in April. That's the best April sales figure for the company in four years. 

US auto sales have been making a comeback, and particularly strong sales in March got people’s hopes up. The March data topped off the best quarter for automakers in the US in years and made some people speculate automakers would have to boost production to meet demand.

That’s ringing true for at least Hyundai so far, which said it would hire nearly 900 people to help it make more cars at its Alabama assembly plant.

Strange but true:
"Crocodile Dundee" a.k.a. Paul Hogan has finally agreed to settle up with the Australian Taxation Office which was after he and a collaborator for more than $150 million in unpaid taxes.

As a result of the settlement, Hogan will finally be able to leave Australia again. He had been banned from traveling outside of Australia since 2010 because of the unpaid bill.

Of course, Crocodile Dundee did fight back. He referred to Australian tax officials as “A-holes” in a recent Sydney radio interview.