People want to be dollar debtors, not dollar creditors.
When I said no one wants dollars, I was referring to people's willingness to hold actual dollars or obligations that pay them dollars in the future.
Your other comment mentions the AI bubble, and also makes me think you don't understand what I'm saying, since we seem to agree about what happens to dollars and debt in a bubble.
Companies are glad to take dollars now in exchange for owing dollars in the future (something they would be less willing to do if the dollar was strong).
They then turn around and spend those dollars on GPUs and electricity.
They think they can get more done with a dollar this quarter by trading it to NVIDIA or a power company than by holding T bills.
Fed rates do not track the real demand to be a dollar creditor.
That's kind of the point, the Fed is the lender of last resort.
If no one wants to give dollars now for more later, then the Fed becomes a creditor to the treasury at an arbitrary rate.
Your other comment mentions the AI bubble, and also makes me think you don't understand what I'm saying, since we seem to agree about what happens to dollars and debt in a bubble. Companies are glad to take dollars now in exchange for owing dollars in the future (something they would be less willing to do if the dollar was strong). They then turn around and spend those dollars on GPUs and electricity. They think they can get more done with a dollar this quarter by trading it to NVIDIA or a power company than by holding T bills.
Fed rates do not track the real demand to be a dollar creditor. That's kind of the point, the Fed is the lender of last resort. If no one wants to give dollars now for more later, then the Fed becomes a creditor to the treasury at an arbitrary rate.