As one of the world's largest economies, the debt situation of the United States has attracted much attention. As of 2022,U.S. TreasuriesThe total has exceeded $33 trillion, equivalent to 137% of its total GDP. This huge debt is not only unimaginable, but it is also growing exponentially. Just in 2022, the United States addedTreasury bondsThat's a whopping $470 billion. Even ifFederal ReserveStrong interest rate hikes and suppressionU.S. TreasuriesIn the case of rapid growth, debt still shows a rapid growth trend. This makes it globalInvestmentsYesU.S. TreasuriesFull of worries. Once the United States does have a debt crisis or even default, the global economy will face a huge shock.
Against this backdrop, central banks have decided to sellU.S. Treasuriesto reduce risk. The central banks of China, Japan, the United Kingdom and other countries are all **U.S. TreasuriesScale. Not only that, but evenFederal ReserveHimself is involved in it, having sold at least $840 billionU.S. Treasuries。This situation further exacerbates the pairU.S. TreasuriesConcerns about the outlook.
In addition to the surge in total debt,U.S. TreasuriesInterest rateshas also put significant debt service pressure on the United States. For a long time,U.S. TreasuriesInterest ratesIt has been at an ultra-low level, and even fell below the zero limit at one point. However, inFederal ReserveInterest rate hikes pushed the market higherInterest ratesagainst the background of a 10-year periodU.S. TreasuriesYields also hit a 10-year high of 4About 5%. That's rightUnited States**What does that mean?HighInterest ratesIt directly increases the cost of debt servicing in the United States. In fiscal year 2022 alone, the United States will need to pay more than $1 trillionInterest expense。IfInterest ratesRising further, this number will increase. Obviously, high stakesInterest expensewill be severely crushedUnited States**of the Treasury. In this case,U.S. TreasuriesThe likelihood of default will increase significantly.
This situation has not only triggered global central banks andInvestmentsThe concerns of the countries have also made countries choose to sellU.S. Treasuriesto reduce risk.
Surprisingly, evenFederal ReserveJoined the sell-off himselfU.S. Treasuriesof the ranks. Over the years,Federal ReserveAll the way through the purchaseU.S. Treasuriesto stimulate economic growth. However, this year,Federal ReserveNot only stopped buying, but also began to sell what was in handU.S. Treasuries, which has sold off at least $840 billion. The purpose of this move is obvious, it is to tighten the US financial marketLiquidityto curb high inflationary pressures within the United States. Over the yearsQuantitative easingpolicy has led to a flood of dollars, and now the United StatescpiInflation rateStill up to 8%. Sell-offU.S. TreasuriesAnd the exchange back to dollars can be consideredFederal ReserveAn important means of curbing inflation. As a result, countries such as China are sellingU.S. TreasuriesIt's more for the sake of hedging and profitFederal ReserveSell-offU.S. TreasuriesIt is a forced cooling measure.
But whatever the reason, this "three-legged" sell-off has undoubtedly shaken the marketU.S. TreasuriesConfidence in the future.
The most surprising thing is that in this sell-off wave, the biggest "pick-up man" turned out to be the domestic families and institutions in the United StatesInvestmentsHe who. Statistics show that in other countries there are **U.S. Treasuriestime, in the United StatesInvestmentsof more than 70% of the purchasers. The main reason for this isU.S. TreasuriesInterest ratesThe rise directly raises the bondsInvestmentsEarnings. For many middle-class Americans, buying something "risk-free."Treasury bondsto get a steady income is still an ideal way to allocation.
Of course, this kind of domestic in the United StatesInvestmentsThe sell-offU.S. TreasuriesThe craze may also be withFederal ReserveTightenLiquiditymeasures. Sell-offU.S. TreasuriesIt means tightening the dollar**, and dollar funds in the hands of businesses and individuals will become more scarce. In this case, purchaseU.S. TreasuriesIt is possible to get a certain amount of dollarsInvestmentsEarnings can be seen as a way to allocate to the dollar. In any case, the United States is domesticInvestmentsIt has become the biggest "pick-up man" in this sell-off, and it has stabilized to some extentU.S. TreasuriesMarket.
But it needs to be soberly recognized that how long this situation of blame can last, and who will pay in the end, is a matter of concern. China**U.S. TreasuriesIt is not based on political considerations, but more on market-oriented choices and risk aversion. In addition, the central banks of Japan, the United Kingdom and other countries as wellFederal ReserveThe sell-off has exacerbated the market's interest in the marketU.S. TreasuriesConcerns about the outlook. And within the United StatesInvestmentshas become the biggest "pick-up man" and has stabilized for the time beingU.S. TreasuriesMarket. However, how long can this interdependence last, globallyInvestmentsremains to be seen.