US Treasury's Trillion-Dollar Problem: Could Rising Yields, Bond Flood Signal Stock Market Storm?
Portfolio Pulse from Piero Cingari
The U.S. Treasury's interest expenditures are nearing $1 trillion, surpassing Tesla's entire market valuation. This surge in interest expenses has been driven by Federal Reserve rate hikes and a widening budget deficit. To finance the rising deficit, the U.S. Treasury is expected to issue more government bonds, which could create a difficult supply-demand scenario, affecting market functioning and liquidity. The Ishares 20+ Year Treasury Bond ETF (NASDAQ:TLT) continues to struggle with the impact of rising bond yields, recording fresh lows in 2023.
July 31, 2023 | 5:49 pm
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The Ishares 20+ Year Treasury Bond ETF (NASDAQ:TLT) is struggling with the impact of rising bond yields, recording fresh lows in 2023.
The rise in bond yields has a negative impact on bond prices. As the U.S. Treasury is expected to issue more government bonds to finance the rising deficit, this could create a difficult supply-demand scenario, affecting market functioning and liquidity. This situation is negatively impacting the Ishares 20+ Year Treasury Bond ETF (NASDAQ:TLT), which is recording fresh lows in 2023.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100