The enormous debt has become an “unbearable burden” for the U.S. government, and reducing the deficit has become urgent. Among the priorities is controlling U.S. Treasury yields to reduce interest expenses. However, a decline in yields will directly affect the demand for U.S. Treasuries from overseas “big investors,” which in turn pushes yields higher.
With the need to reduce the deficit while maintaining U.S. Treasuries, what other options does the U.S. government have?
In a report on March 31, Barclays proposed several countermeasures, including government spending cuts, stabilizing Treasury supply by the Treasury Department, and encouraging domestic banks in the U.S. to purchase Treasuries, in order to stabilize yields and maintain demand for U.S. Treasuries.
Overseas Demand for U.S. Treasuries Becomes a Challenge
Foreign investors have long been the main buyers of U.S. fixed-income securities. In recent years, foreign investors have…
