Bank of America Warns Bond Investors as US Debt Nears $40 Trillion
· Business · Fortune, Bloomberg, LiveMint
The US national debt has reached approximately $39.9 trillion and is projected to surpass the $40 trillion threshold imminently. Bank of America chief investment strategist Michael Hartnett warns that continuous government borrowing makes long-duration Treasurys unattractive. The heavy supply of government bonds requires higher yields to attract investors, with the 10-year Treasury yield reaching 4.6% and the 30-year yield hitting 5.2%. Hartnett anticipates the national debt could climb to $50 trillion by 2029 if current fiscal trajectories persist. Rising yields offer higher returns on new bonds but reduce the market value of existing fixed-income assets.
Why it matters
Spiking US Treasury yields and soaring national debt levels increase borrowing costs globally and signal growing fiscal risks for fixed-income investors.
Read the original report — Fortune
Join us on Telegram
Breaking news the moment it lands. At 10,000 members we ship the Android app.