US Treasury sells bonds to replenish the budget

The US Treasury actively supports the sale of long-term bonds at a record high price. This is necessary to cover the growing budget deficit. The agency plans to raise about $ 1 trillion of funds from the placement of business papers.

According to forecasts of a number of experts, in the coming days, the treasury will keep sales of promissory notes and bonds at record levels, at times increasing their volumes. The total volume of 3-year, 10-year and 30-year securities that are scheduled to be auctioned next week could reach $ 84 billion.

The increase in the supply of state bonds was preceded by measures to reduce taxes, as well as an increase in government spending. According to experts, this worsens the financial prospects of the American economy against the background of rising costs for servicing the country's debt. Note that the size of the US debt is approaching $ 16 trillion.

According to Brian Edmonds of the analytical company Cantor Fitzgerald, the offer of securities in the US stock market will increase. Experts from a number of large companies, such as Citigroup Inc., TD Securities, Deutsche Bank, and Wells Fargo Securities, agree with him. Analysts from a number of companies, including NatWest Markets and UBS Securities Inc., expect the ministry to increase sales of debt obligations. They believe that in the next three months, refinancing on 3-year, 10-year and 30-year securities will increase by $ 1 billion.

In 2018, the size of the issue of the Ministry of Finance of the United States amounted to $ 1.34 trillion, which more than doubled the volume of 2017, equal to $ 550 billion. the remaining amount is on bills of exchange. In the next four years, the volume of the new issue will vary in the range from $ 1.25 trillion to $ 1.4 trillion, experts at Deutsche Bank predict.

Last year, the US budget deficit reached a six-year high of $ 780 billion. According to forecasts by the Congressional Budget Office, this year the budget deficit will be $ 973 billion, and in 2020 it will exceed $ 1 trillion. In the next ten years, the US authorities will spend about $ 7 trillion on servicing the national debt.

Imposing US government debt figures create tension among market participants. According to Jeffrey Gundlach, an investor, and founder of the investment company DoubleLine Capital, the US economy may be completely bogged down in debt. He considers the high level of the state debt of the country and its active growth to be one of the main risks for the economy. The billionaire investor Seth Klarman agrees with him, adding to the number of risks America's declining influence around the world.