Natixis - At some point, the US external debt will be larger than non-residents demand for dollar-denominated debt

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Natixis

Patrick Artus

At some point, the US external debt will be larger than non-residents' demand for dollar-denominated debt

The US savings shortfall is structural and is being worsened by expansionary fiscal policies. This has resulted in a continuous rise in the US net external debt. In the future, the US external debt will inevitably exceed ( ex ante ) non-residents' demand for dollar-denominated assets. There will then have to be an adjustment that will be: Either rising interest rates and falling share prices in the United States; Or a depreciation of the dollar .

12/08/2020 6 EN

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Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

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Analysts

Patrick Artus

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At some point, the US external debt will be larger than non-residents' demand for dollar-denominated debt

Long Bono 01/41 vs. Short Bund 05/41

Overview of the Asian covered bond market

Consolidation after the euphoria?

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