© Reuters. FILE PHOTO: A Pacific Investment Management Co (PIMCO) sign is shown in Newport Beach, California August 4, 2015. REUTERS/Mike Blake/File Photo
NEW YORK (Reuters) – Bond investors are expected to pocket higher debt payouts for holding long-term U.S. government debt due to its wide fiscal deficits, U.S. bond giant PIMCO warned on Thursday.
With apparently no end in sight for increases in government spending, concerns over U.S. debt sustainability will likely pressure government bond prices, pushing yields higher, PIMCO’s Head of Public Policy Libby Cantrill and Rich Clarida, global economic advisor, said in a note.
“With bond yields declining in recent months, it would appear that mounting U.S. federal debt isn’t at the forefront of investors’ minds,” they said. “Yet many clients have asked about the sustainability of the path of U.S. debt, whether politicians plan to do anything about it, and whether the ‘bond…
