US Debt: 10-Year Sees Big Rise in Yield After Fitch Downgrade

4 August 20239 months ago babelfish

Fitch's qualitative writedown of US debt has not gone unnoticed. The 10-year US Treasury yield rose more than 4.15% in August, testing levels last seen in November 2022 and adding nearly 30 basis points since the start of the third quarter amid broad issuance of bonds and an increasingly hawkish outlook for the Fed.

In the second week of August, the US Treasury increased the size of its long-term debt issuance to $103 billion, more than markets expected, to offset its growing debt needs.

The move underscored the US's reliance on higher debt and concerns about impending fiscal deterioration, contributing to Fitch's decision to downgrade the country's sovereign credit rating from AAA to AA+. Meanwhile, the ADP report showed 324,000 private sector jobs were added to the US economy in July, amplifying evidence of a strong job market after JOLTS indicated strong job opportunities and jobless claims fell to multi-month lows. These data, which however give only a partial idea of US debt, suggest that the Fed could still hold on to monetary tightening. This chart from an hour ago in'indicates the trend of the Stars and Stripes stock

The results provide an alibi for a policy that is nonetheless punishing the housing market and setting the stage for a series of future defaults. This rise in interest rates, in the face of forthcoming very high auctions on US securities, leads us to foresee a bloodbath for the US treasury, which will find itself paying ever higher interest, taking resources away from other public expenditure.

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The article US Debt: 10-Year Sees Big Rise in Yield After Fitch Downgrade comes from Economic Scenarios .

This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/debito-usa-il-decennale-vede-un-grosso-aumento-nel-rendimento-dopo-il-downgrade-di-fitch/ on Thu, 03 Aug 2023 10:00:59 +0000.