12.04.2023
Is China Guilty of Category Fraud?
With movie awards season around the corner, some entertainment pundits may use the term “category fraud” to describe races in…
Over the last 15 years, the U.S. Treasury market has grown from $3.3 trillion in 2000 to $14.3 trillion at the end of 2016; certainly the Financial Crisis and subsequent stimulus programs have contributed to this massive growth. Throughout this period, foreign demand has constituted a consistent 40–50% of the market for U.S. Treasuries. However, the demand has shifted over the years, and our chart of the week chronicles the evolution of foreign buyers and sellers of U.S. Treasuries from 2000 through 2016. Perhaps most notable is that in 2015, foreign demand began to wane as China and other emerging market nations began to defend their currencies against appreciation and consequently reallocated away from U.S. debt.
On Monday, former Federal Reserve Chairs Bernanke and Greenspan spoke about the Federal Reserve’s balance sheet and the United States debt market. Bernanke believes the Federal Reserve should aim to reduce its balance sheet from $4.4 trillion to somewhere in the range of $2.3–2.8 trillion. Of the Federal Reserve’s $4.4 trillion in assets, approximately $2.5 trillion are U.S. Treasury Securities. From 2019-2026, $250 billion in Treasury securities will reach maturity each year. These securities will have to be rolled over in addition to any further deficit spending. To avoid this constant debt overhang, the administration is considering “ultra-long-term bonds”, which would push the repayment of this debt to beyond 2049. Ultimately, the declining foreign demand for U.S. Treasuries combined with the Trump Administration’s plans to cut taxes and increase spending could make it difficult for the Federal Reserve to reduce its balance sheet without facing higher yield demands at Treasury auctions.
12.04.2023
With movie awards season around the corner, some entertainment pundits may use the term “category fraud” to describe races in…
11.30.2023
The holiday spending frenzy is well underway as some of the biggest shopping days of the year, including Black Friday…
11.16.2023
October proved tumultuous for investors as all major U.S. equity indices were negative and the CBOE VIX Index, which serves…
11.08.2023
Earlier this year, the regional banking crisis and eventual collapses of Silicon Valley Bank, Signature Bank, First Republic Bank, and…
11.01.2023
U.S. equities declined for the third consecutive month in October amid an environment of higher yields and underwhelming earnings reports…
10.13.2023
This video is a recording of a live webinar held on October 26 by Marquette’s research team, featuring in-depth analysis…
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