‘Explosion’ in U.S. Bond Supply Endangers Global Market Rally
- $1 trillion overhang to weigh on credit, FX, stocks: Deutsche
- Strategist in minority as credit rally, tax cuts preoccupy
This article is for subscribers only.
A “dramatic” increase in U.S. bond supply over the next year risks unhinging global markets from their bullish foundations, warns Torsten Slok at Deutsche Bank AG.
The supply of U.S. government debt will almost double to $1 trillion this year to finance a widening budget deficit as the Federal Reserve whittles down its holdings. Unless new buyers emerge, the overhang could be far-reaching.