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Bond markets flash warnings with waning Treasuries demand - Bloomberg

According to reporting by Bloomberg, demand for US Treasuries have dipped to their lowest numbers since 2008, flashing warning signs that all is not alright on the homefront.

Key quotes

Of the $2.4 trillion of notes and bonds the Treasury Department offered last year, investors submitted bids for just 2.6 times that amount, data compiled by Bloomberg show. That’s less than any year since 2008. 

Yet the drop-off is an early warning that demand for Treasuries may not keep up as the U.S. goes deeper into the red. Debt supply jumped in 2018 largely because of the Trump administration’s tax cuts. Forecasts show the deficit could soon swell past a trillion dollars and stay that way for years to come.

The Treasury has enlarged its auctions for four straight quarters, surpassing levels last seen in 2009. What’s more, the U.S. has grown more reliant on the public to finance its deficit as the Federal Reserve scales back its purchases of Treasuries to shrink its $4 trillion of crisis-era bond holdings.

 

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