The US government borrowings are at record high levels, and the banks have been unable to lend money for new home purchases aggressively only because there are not enough takers, plus the banks also are taking extra precaution in terms of realistic valuation of the assets, before lending.

The US banking industry is now losing money on increasing credit card delinquencies which might force the banks to start increasing the charges and interest rates on all future loans. With no more funding of US deficits by Japan and China, it is obvious that the US government will have to resort only to market borrowings.

Higher demand from US government for available demand, could only lead to reduced availability of bank finance for individuals and corporates. All these might lead to higher interest rates in the future in US.