By boldness of the beard
NEW YORK (Reuters) – A possible slowdown in the public budget withdrawal of the public budget of the public budget and the Scott Bessens Ministry of Treasury against the long -term debt in the short term in the short term to the bond market tensions with continued financial concerns.
The Federal Reserve minutes from January 28 to 29 that were released this week showed that officials weigh a possible stop or slowing down to reduce the public budget at the Federal Reserve Bank, known as the quantitative tightening (QT), where the ceiling of government debt is binding on the bank's ability Central to measure the liquidity of the market. Meanwhile, Bessent said in an interview with Bloomberg TV on Thursday that the expansion of government debt issuance for a long time is not on the table.
Treasury revenues, which are inversely transmitted to prices, fell after the Federal Reserve minutes on Wednesday and BESSENT interviewed more optimism to pay the returns on Thursday.
However, his statements have not disrupted the market expectations to increase government debt, as investors and analysts expect that the Treasury will eventually need more to compensate for the decrease in government revenues from the proposed tax cuts of President Donald Trump.
Brej Khurana, director of the fixed income portfolio in Witzton Management, said that it is encouraging that there will be the Treasury Secretary “realizing the costs of financing.” Besent said earlier this month that the Trump administration's focus would have a 10 -year treasury revenue.
“At the same time, if the returns are less materially, they are likely to make more tax cuts … if the returns decrease a lot, then I think Bessant will try to pressure the bonds with long times,” Khourana said.
JPMorgan analysts said in a note on Thursday about the fears of the bond market about excessive debt supply that could be in the background in the coming months, given the administration's focus on long -term returns. But they said that they still expect the large government borrowing needs in the coming fiscal year will lead to increases in long debt sales.
Trump plans to renew and expand the tax cuts he signed during his first presidency in 2017, which is scheduled to end at the end of this year. This deficit may increase by more than $ 4 trillion over the next ten years, and has estimated the Congress budget office.
Discounts in the Federal spending led by the government efficiency management in Illon Musk, as well as possible revenues from Trump's planned tariffs on imports, can help reduce the growth of deficit, although the extent of its effect is uncertain.
Comments are closed, but trackbacks and pingbacks are open.