Beware the $10 Trillion Glut of Treasuries as Big Deficits Loom
- Net issuance seen rising after steady declines since 2009
- Fed seen adding to supply as Treasury ramps up debt sales
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Negative yields. Political risk. The Fed. Now add the U.S. deficit to the list of worries to keep beleaguered bond investors up at night.
Since peaking at $1.4 trillion in 2009, the budget deficit has plunged amid government spending cuts and a rebound in tax receipts. But now, America’s borrowing needs are rising once again as a lackluster economy slows revenue growth to a six-year low, data compiled by FTN Financial show. That in turn will pressure the U.S. to sell more Treasuries to bridge the funding gap.