Where’s the Bond Market’s Breaking Point? It’s Not $35 Trillion
There’s a truckload of cash looking for the high Treasury yields and stellar economic story the US offers.
A statue of the first Secretary of the Treasury Alexander Hamilton in front of the US Treasury Department building.
Photographer: Chip Somodevilla/Getty Images North AmericaEveryone is worried about the excessively high level of US government debt. Everyone, that is, except America’s creditors.
Take last week’s quarterly refunding by the US government. The US Treasury Department auctioned $125 billion of three-, 10- and 30-year bonds. Investors submitted bids for about 2.5 times the amount offered at each of the auctions, which was slightly above the average going back to early 2020 when the government ramped up its borrowing to support the economy through the Covid-19 pandemic. When it comes to the benchmark Treasury, that’s even higher than the average during the late 1990s and early 2000s when the US was running budget surpluses!