taken from its conference call,mind you these guys have $22 Billions cash sitting on their balance sheet !
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This inflation problem won't go away by simply wishing it away especially with the Fed's proverbial foot still on the gas pedal, which of course, brings us to interest rates. The economist Rudi Dornbusch famously said in the 60's that in economics, things take longer to happen than you think they will, and they happen faster than you ever thought that they could. Such is the case, I believe, with interest rates in the United States. They're too damn low. And the reason that they're so low is because in the past year and a half, the Fed has purchased over $4 trillion of government securities.
That's $4 trillion of government securities that had been taken out of the market. Poof, they're gone. The Fed has created a squeeze of gargantuan proportions in these securities that has rippled through all the fixed income markets. The only people that own U.S. fixed income securities are people who need to own them, like banks and insurance companies, just to name a few. Traders may dabble in government securities, but investors won't go near them because there isn't a bullish case to be made for investing in government securities. Today the 10-year note yields less than 1.2%.
If the rate on those notes goes up just 13 basis points, a little over a 10th of 1%, then the entire interest carry on the bond for the year will disappear. That sounds like a miserable investment to me. Getting back to inflation. If the inflation rate this year is 6% -- and that's a low number, I believe -- then the negative real return on a 10-year note will be minus 4.75%. That's minus 4.75%. Who would want to own a security that guarantees that you'll lose almost 5% of your purchasing power in a single year? Most people have already decided to either hold cash or move out the risk curve rather than lock in a real loss of such large proportions. The issuance of government securities will continue.
For this year, the federal deficit is forecast to be $3 trillion, which means there is no end to the supply of government bonds that need to be issued to finance our government's activities. And with so much issuance of government securities on the way and with a strong economy and with inflation running so hot and with a negative real yield so unattractive, the Fed may have a little choice but to take their foot off the proverbial gas pedal and take away the punch bowl, finally allowing interest rates to rise. There's only so long that the Fed can delay the inevitable. And to me, and maybe to Rudi Dornbusch, of blessed memory, that time may soon be upon us.
Mary Skafidas -- Vice President, Investor Relations and Corporate Communications
Thank you, Jim. Thank you for that perspective, and thank you, David. That concludes the Loews call for today and. As always, we want to thank you for your continued interest. Please feel free to reach out to me with any additional questions at
mskafidas@loews.com. A replay will be available on our website, loews.com, in approximately two hours. That concludes the Loews call for today.
Operator
[Operator Closing Remarks]
Duration: 36 minutes
Call participants:
Mary Skafidas -- Vice President, Investor Relations and Corporate Communications
James S. Tisch -- President and Chief Executive Officer
David B. Edelson -- Senior Vice President and Chief Financial Officer
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