The U.S. 30-year Treasury rate has reached 5.13%, a level last seen in October 2023. The last time this rate was at this level was in 2007, when the U.S. federal debt was about $9 trillion. Today, that debt is nearing $37 trillion.
I believe bond market participants are signaling a lack of confidence that the fiscal situation in the United States will improve during President Trump’s second administration. Like many financial professionals, I had high hopes that President Trump’s election would bring the fiscal situation in order. Unfortunately, the “Department of Government Efficiency” has not been as efficient as many had hoped, and U.S. Congress seems completely uninterested in reducing federal spending in a meaningful way.
The tax cut bill currently moving through Congress, fully backed by the White House, will exacerbate the fiscal situation. If this trend of rising long-term Treasury rates continues, the United States will soon face very tough decisions that neither Wall Street nor Main Street is ready to face.
The United States has been facing these tough decisions for quite some time, and so far has chosen not to make them. There’s a great deal of ruin in a nation.
Agreed. I do think we are reaching a point that the market will force the Government’s hand.
By the way, this is something many other developed nations are facing, to varying degrees. There’s been a lack of fiscal conservatism governance for decades. Watching President Milei succeed in Argentina gave us fiscal conservatives some hope that the same would happen in The US and other countries. But I have lost that faith.
The U.S. 30-year Treasury rate has reached 5.13%, a level last seen in October 2023. The last time this rate was at this level was in 2007, when the U.S. federal debt was about $9 trillion. Today, that debt is nearing $37 trillion.
I believe bond market participants are signaling a lack of confidence that the fiscal situation in the United States will improve during President Trump’s second administration. Like many financial professionals, I had high hopes that President Trump’s election would bring the fiscal situation in order. Unfortunately, the “Department of Government Efficiency” has not been as efficient as many had hoped, and U.S. Congress seems completely uninterested in reducing federal spending in a meaningful way.
The tax cut bill currently moving through Congress, fully backed by the White House, will exacerbate the fiscal situation. If this trend of rising long-term Treasury rates continues, the United States will soon face very tough decisions that neither Wall Street nor Main Street is ready to face.
The United States has been facing these tough decisions for quite some time, and so far has chosen not to make them. There’s a great deal of ruin in a nation.
Agreed. I do think we are reaching a point that the market will force the Government’s hand.
By the way, this is something many other developed nations are facing, to varying degrees. There’s been a lack of fiscal conservatism governance for decades. Watching President Milei succeed in Argentina gave us fiscal conservatives some hope that the same would happen in The US and other countries. But I have lost that faith.