Report
Is there a problem with US public debt?
A number of economists and financial market participants are beginning to worry about the level of US public debt, and the prospects of this debt rising in the future. Are they right? Public debt becomes dangerous if the demand ( ex ante ) for public securities falls below the supply ( ex ante ) of public securities. To find out if this is the case, we can look at: Domestic and non-resident demand for US Treasuries; The trend in US long-term interest rates; The sovereign CDS of the United States. Today, it seems that: Private investors, both domestic and non-resident, finance the Federal Reserve's issues and sales of Treasuries; Real long-term interest rates remain lower than real growth in the United States; Sovereign CDS rose only moderately after the introduction of quantitative tightening. For the time being, there is no risk of US public debt becoming unsustainable.
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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.
Patrick Artus
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