Nobody knows what market distortions the Federal Reserve’s prolonged ultra-low interest rates are creating, but count progressive local governments as big winners. Behold how Puerto Rico on Lake Michigan, otherwise known as Chicago, is financing budget deficits and public pensions with cheap debt. Chicago has been seeking to take advantage of historically low interest rates by refinancing debt—even as its credit rating has deteriorated amid swelling budget deficits and pension payments. The city started the fiscal year $838...

Source: Wall Street Journal February 01, 2020 00:00 UTC