economy
Here's how the private sector can save U.S. Treasurys, UOB says
The U.S. fiscal situation appears to be a "slow burning overhang in the background" for the economy, according to a report by Singapore's UOB.
TL;DR
- The Treasury market may require a greater role from the private sector due to rising federal debt projections.
- Federal debt held by the public is projected to reach 120.21% of GDP by 2036.
- The estimated cost of the Iran war and potential global tariffs contribute to fiscal stress and higher debt costs.
- Higher fiscal stress and debt levels are driving government yields higher.
- The private sector will need to absorb a growing supply of Treasurys as foreign buyers show less appetite.
- USD-denominated corporate issuance in the U.S. has increased significantly, adding to overall debt supply.
- Investors are reportedly shying away from bonds due to inflation concerns.