With long rates falling in recent weeks, Treasury supply has seemingly become less important as a driver of long rates.
But the fiscal challenges have not disappeared.
Next week, we have a 10-year auction on Monday and a 30-year auction on Tuesday. And looking into 2024, Treasury auction sizes will be, on average, 23% higher than in 2023.
Because of the constant rise in government debt levels, investors need to monitor not only Treasury auctions but also rating agencies and the term premium.
In this short presentation is a collection of relevant data for thinking about the US fiscal situation and the likely transmission channels to financial markets.
Source: OMB, Haver Analytics, Apollo Chief EconomistSource: CBO, Haver Analytics, Apollo Chief EconomistSource: The IMF, Apollo Chief Economist. Note: Data as of year-end 2022.
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