New York
NEGATIVE yields. Political risk. The Fed. Now add the US deficit to the list of worries to keep beleaguered bond investors up at night.
Since peaking at US$1.4 trillion in 2009, the budget deficit has plunged amid government spending cuts and a rebound in tax receipts. But now, America's borrowing needs are rising once again as a lacklustre economy slows revenue growth to a six-year low, data compiled by FTN Financial shows. That in turn will pressure the US to sell more Treasuries to bridge the funding gap.
No one predicts an immediate jump in issuance, or a surge in bond yields. But just about everyone agrees that without drastic changes to America's finances, the government will have...
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