U.S. Treasury Bonds

[Voluntarist]

Freak sell-off of ‘safe haven’ US bonds raises fear that confidence in America is fading​

The upheaval in stocks has been grabbing all the headlines, but there is a bigger problem looming in another corner of the financial markets that rarely gets headlines: Investors are dumping U.S. government bonds.

Normally, investors rush into Treasurys at a whiff of economic chaos but now they are selling them as not even the lure of higher interest payments on the bonds is getting them to buy. The freak development has experts worried that big banks, funds and traders are losing faith in America as a stable, predictable, good place to store their money.

“The fear is the U.S. is losing its standing as the safe haven,” said George Cipolloni, a fund manager at Penn Mutual Asset Management. “Our bond market is the biggest and most stable in the world, but when you add instability, bad things can happen.”

That could be bad news for taxpayers paying interest on the ballooning U.S. debt, consumers taking out mortgages or car loans — and for President Donald Trump, who had hoped his tariff pause earlier this week would restore confidence in the markets.

A week ago, the yield on the 10-year Treasury was 4.01%. On Friday, the yield shot as high as 4.58% before sliding back to around 4.50%. That’s a major swing for the bond market, which measures moves by the hundredths of a percentage point.

Among the possible knock-on effects is a big hit to ordinary Americans in the form of higher interest rates on mortgages and car financing and other loans.

“As yields move higher, you’ll see your borrowing rates move higher, too,” said Brian Rehling, head of fixed income strategy at Wells Fargo Investment Institute. “And every corporation uses these funding markets. If they get more expensive, they’re going to have to pass along those costs customers or cut costs by cutting jobs.”

 

[Brian4Liberty]

“The fear is the U.S. is losing its standing as the safe haven,” said George Cipolloni, a fund manager at Penn Mutual Asset Management.

Diversionary propaganda. No one is talking about the the truth.

For decades, the threat that foreign nations could hold over the head of the US is their purchasing and holding of US debt, especially in the form of bonds. No doubt the Chinese, and possibly other nations, have decided to limit purchases, and maybe even start selling. It's a warning shot of what they could potentially do.

The irony is that this basic tactic is being ignored and covered up. The politicians, the financial press, the MSM, all want to pretend that it is not going on. This is intentional.

My prediction: get ready for another round of "monetizing the debt". Their only solution will be for the Fed to start printing money and buying bonds. Powell won't want to do it, especially not to help Trump, but they will have no choice.

To make matters worse, look at all of the increasing deficit spending the (uniparty) Congress wants to engage in. That is why this topic is verboten. Democrats don't want to say anything. GOP doesn't want to say anything. Trump certainly doesn't want to admit it.

Fun times.

 

[Brian4Liberty]

 

[Brian4Liberty]

 

[Voluntarist]

$9 trillion of US debt will mature in 2025​

The outsized U.S. national debt has ballooned to $36.2 trillion, and a staggering $9.2 trillion of it is set to mature in 2025. This accounts for 25.4% of the country’s total debt, raising concerns over its implications for financial markets, interest rates, and economic stability.

The rapid accumulation of debt has been fueled by historic levels of deficit spending. More recently, since 2020, debt has grown by $13 trillion, averaging $2.6 trillion per year for five consecutive years.

Meanwhile, the federal deficit for 2024 stands at $1.8 trillion, or 6.4% of GDP, and interest payments on the debt have ballooned to over $1 trillion per year, according to data shared by the finance commentary platform The Kobeissi Letter on February 4.

The $9.2 trillion maturing debt is nearly 31.05% of the annual U.S. GDP, projected to be around $29.63 trillion in 2025. This figure is alarming when compared to other key financial benchmarks.

The maturing debt is almost double the total federal revenue of $5.03 trillion. 70% of this debt—about $6.5 trillion—will mature between January and June 2025, creating immense pressure on bond markets.

Much of this maturing debt was borrowed at significantly lower interest rates. With the average interest rate on U.S. Treasury debt now at 3.2%—the highest since 2010—rolling over this debt at current yields will be expensive.

https://home.treasury.gov/resource-...treasury_bill_rates&field_tdr_date_value=2025
https://www.treasurydirect.gov/auctions/announcements-data-results/

 

[Brian4Liberty]

$9 trillion of US debt will mature in 2025​

https://home.treasury.gov/resource-...treasury_bill_rates&field_tdr_date_value=2025
https://www.treasurydirect.gov/auctions/announcements-data-results/

Much of this maturing debt was borrowed at significantly lower interest rates. With the average interest rate on U.S. Treasury debt now at 3.2%—the highest since 2010—rolling over this debt at current yields will be expensive.

Yeah, it depends upon how long the debt was that is maturing. If the average is 3.2%, then it was relatively older debt. The past few years, much of the highest paying debt has been short term (like 3 months). Inverted yield curve lasted a long time. The 3 mo. T-Bills have come down a bit, but ~4.3% is what they will have to pay if they turn the debt over to short term T-bills.

 

[oyarde]

Interest on debt expected to be 27 percent of revenue in 2034 , 200 percent increase over 2021

 

[Madison320]

Interest on debt expected to be 27 percent of revenue in 2034 , 200 percent increase over 2021

2034? It could do that by the end of the year. It's already over 20%.

 

[Voluntarist]

Something more to factor in is Japan and its holdings of US Treasuries (like $1 trillion worth). Less than a month ago, Japanese Finance Minister Katsunobu Kato was ruling out using the country's U.S. Treasury holdings as a bargaining tool. That's now changed; Kato said, earlier today, that Japan's huge $1 trillion-plus in U.S. Treasury holdings are among the tools available for Tokyo to use in trade negotiations with the United States:

The remark came as Japan's top trade negotiator Ryosei Akazawa met with U.S. Treasury Secretary Scott Bessent in Washington for a second round of bilateral tariff talks.

Kato said the primary purpose of Japan's U.S. Treasury holdings - the largest in the world - is to ensure it has sufficient liquidity to conduct yen intervention when necessary.

"But we obviously need to put all cards on the table in negotiations. It could be among such cards," Kato said in a television programme when asked whether Japan, in trade talks with the U.S., could reassure Washington it will not sell its Treasury holdings in the market.

"Whether we actually use that card, however, is a different question," Kato added.