![]() ![]() ![]() ![]() government shutdown: What's the impact on U.S. That could bring in more foreign buyers again," Alden said.įor now, however, Alden noted a heightened risk of liquidity issues, market functioning issues, and the equity markets not doing as well over the next six months. dollar declines significantly or if we see the price of oil decline. "That means insurance companies, pensions, asset managers, hedge funds, and actual households are the only ones able to absorb this debt issuance unless the U.S. economy? Watch the video above for details.ĭomestic banks are no longer buying Treasuries because of the financial stress the banking sector has been through in recent months, Alden pointed out. What would a surplus of Treasuries and insufficient global demand mean for the U.S. dollar and oil prices are so high? "That's the risk to keep watching," she said. That is the key risk Alden is watching – who will buy the U.S. In this environment of strong dollar, higher yields, and high oil prices, it's challenging to see where all the supply of treasuries will get bought from." "They might even sell some Treasuries to defend their currencies. dollar index has advanced, leading to developing countries going on a U.S. Making things worse is how quickly the U.S. "A lot of the foreign buyers are pulling back their purchases of Treasuries because they're more in currency defense mode," she said. dollar rises, other countries buy fewer Treasuries because of the high exchange rate, and yields tend to go up, Alden explained. And ironically, there's an inverse relationship between the dollar and Treasury yields." "Their own currencies are weakening versus the dollar while oil is strong. And that debt is hardening relative to their cash flows," Alden said. "Developing countries have dollar-dominated debt. This trifecta of events puts a lot of pressure on developing countries and lowers global demand for U.S. Treasury yields, and oil rising at the same time is concerning, Alden told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News, on the sidelines of Pacific Bitcoin Festival in Santa Monica, California. In the meantime, the 30-year Treasury bond yield crossed above 5% – something also not seen since 2007. The yield on the 10-year Treasury note hit a 16-year high last week, climbing to 4.884%. government debt? Lyn Alden, Founder of Lyn Alden Investment Strategy, breaks down a number of critical risks connected to the turbulence in the bond market. Treasury yields to 16-year highs, is there enough demand for U.S. (Kitco News) With the bond market rout witnessing a surge in the U.S. ![]()
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