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The total U.S. national debt exceeds US$33 trillion for the first time_Oriental Fortune Network

The total U.S. national debt exceeds US$33 trillion for the first time_Oriental Fortune Network
The total U.S. national debt exceeds US$33 trillion for the first time_Oriental Fortune Network

On September 18, local time, according to data released by the U.S. Department of the Treasury, the total U.S. national debt exceeded $33 trillion for the first time on the 18th.

New York Times” reported that the total national debt hit a new high at a time when federal spending is once again causing controversy and the government is facing a shutdown. The fiscal outlook of the United States is worrying. It is reported that if Congress fails to pass a long-term appropriation bill or a short-term spending bill before September 30, the government will face a shutdown crisis.

Further reading

7.6 trillion U.S. debt will mature within a year! Will the huge debt burden become a “major hidden danger” for the U.S. economy?

After the U.S. government avoided a historic default, the U.S. Treasury led the issuance of a huge amount of short-term U.S. debt to supplementRevenue.

Agency statistics show that 31% of outstanding U.S. government debt will mature within the next 12 months. As the U.S. government faces the risk of another shutdown, questions about how the Treasury Department can continue to meet financing needs have once again become the focus. The impact of recent fluctuations in U.S. bond yields on capital markets shows that this may be a risk that cannot be ignored.

Who will take over?

Data compiled by Torsten Slok, chief economist at asset management company Apollo, show that $7.6 trillion will mature next year, which is at a historically high level.He thinks this is the futureinterest rateSources of rising pressure.

In May this year, external concerns about the U.S. government’s default pushed the yield on U.S. Treasury bonds due in early June to over 7%. After the U.S. Congress resolved the debt ceiling dispute, the Treasury Department increased the issuance of Treasury bonds to raise funds, and warnings about market volatility or chaos also attracted widespread attention. Ultimately, short-term Treasury bills proved to be an “effective medium” to absorb the increase in issuance demand.

The U.S. Treasury Department’s advisory group, the Borrowing Advisory Committee (TBAC), wrote in an open letter to Treasury Secretary Janet Yellen released last month that it expects this to continue given current levels of demand. Even if coupons rise slightly, short-term Treasury bonds are expected to account for more than 20% of outstanding debt in the future, which is the highest value of the recommended range. TBAC said that a level of just above 20% would be acceptable for a period of time, but recommended that the Treasury take steps to gradually normalize this level.

Ben Emons, senior portfolio manager and head of fixed income at NewEdge Wealth in New York, said: “The question TBAC raises is whether we are issuing too many notes (short-term U.S. Treasuries). The real question is what the Treasury Department will do next. What. Issuance of more long-term bonds? The minutes of the TBAC August meeting gave the impression that the Treasury Department was steering the issuance of more long-term bonds.”

Whether it can find a “taker” of long-term U.S. debt has become very critical.Treasury to auction $35 billion of 10-year bonds on Tuesdaysecuritiesfollowed by a $20 billion 30-year auction on Wednesdaysecurities. The scale has increased compared with the previous period.

Lawrence Gillum, fixed income strategist at LPL Financial, doesn’t think outsiders should worry about buying.He said: “There are too manyCash flowdeposit cash andcurrencymarketfund, the Treasury is able to issue large amounts of notes without any negative impact on market prices.Our argument is that as long as Treasury bonds provide risk-freeinterest rate, there will be buyers of government bonds. The only problem is the price. “

Federal deficit alert remains unresolved

Behind the bond issuance by the U.S. Treasury Department, the rising federal deficit problem remains unresolved, which is also the origin of a new crisis and the risk of default in the future.

Now the Republicans and Democrats are engaged in another game in Congress, and the White House faces the threat of a shutdown starting in October.Republican hard-liners are urging lawmakers to oppose funding to avert a government shutdown unless Democrats meet demands to cut spending to a level of $1.47 trillion by 2022. Republicans have long hoped to reverse rising debt by limiting government spending.

Yardeni Research said that with economic growth and unemployment near historic lows, the federal deficit accounts for a nominalgross domestic product(GDP) is “highly unusual.” Because deficits tend to widen during recessions, tax revenue declines and spending increases as governments take measures aimed at boosting the economy. “In the case of a rebound in inflation, deficits will obviously exacerbate the rise in bond yields. This will be a very bad situation for stock and bond investors.” The report believes that because the U.S. federal deficit is too large, inflation needs Only by continuing to slow down will the yield on the 10-year Treasury bond remain within its recent range.

After experiencing a strong rise in the first half of the year, U.S. stocks have been more volatile recently, which is closely related to the sharp rise in U.S. bond yields. The concern is that bond yields may become more sensitive to the supply and demand of U.S. government debt. “For now, we are sticking to our old normal bond yield forecasts based on slower inflation forecasts, but we are increasingly concerned about the glut of U.S. Treasuries,” the report said.

Agency analysts said that the current market environment is that the U.S. Treasury Department will continue to sell a large amount of bills and bonds during the rest of this year and next year, and the Federal Reserve’s quantitative tightening program is also reducing its holdings of Treasury bonds by about $60 billion on a monthly businessbankstart to let itStock investmentPortfolios mature in response to deposit outflow pressure. The question becomes whether the market can digest these bonds in time, or will interest rates have to rise to attract these buyers?

Goldman SachsFormer Chief U.S. StrategistCohen(Abby Joseph Cohen) also expressed concerns about a government shutdown. “If we can’t reach a deal and the government shuts down, there will be all kinds of consequences that are hard to quantify.” She further said, “That could put pressure on the dollar, it could put pressure on the Treasury Department. That doesn’t mean we’re going to be shut down anytime soon.” We’re going into recession, but I don’t think the situation is as optimistic as it was 18 months ago.”

Related reports

The underlying logic of the endless expansion of U.S. national debt

The risk of a U.S. government shutdown is rising. Are the Fed and the U.S. economy ready?

(Source of article: CCTV News Client)

Article source: CCTV News Client

Original title: The total U.S. national debt exceeds $33 trillion for the first time

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