As early as 2011, the then United States was forced to close its doors because the U.S. debt reached the debt ceiling.
Now, 11 years later, during which time the US Congress has raised the US debt ceiling several times and suspended the debt ceiling, but this risk has never gone away.
In December 2021, the U.S. debt ceiling was raised again to 31After $4 trillion, I didn't expect that just a year later, in December 2022, the balance of the U.S. debt hit the debt ceiling again, but now it is difficult for the United States to agree on how to solve this difficulty.
It is clear that the US debt problem is far more difficult than it was in 2011.
Because after last year's midterm elections, the United States was **, the two parties controlled the two houses of Congress respectively, although both sides agree that the problem of US debt needs to be resolved, but both sides use this as a threat, hoping that the other side will make concessions in other aspects, therefore, the US debt will break through the ceiling, and the possibility of not making an appointment in substance is increasing.
Of course, the U.S. ** believes that this is just a game and will eventually reach an agreement before a substantive default. Because in the past, the US Congress has raised the ceiling of the US debt several times, and this time should be no different.
But apparently the United States is overly optimistic, and this time it is really very different from the past.
In the past, U.S. bonds have been a mandatory item for many countries' foreign exchange reserve assets, but now many countries have sold U.S. bonds and avoided U.S. bonds.
This includes China and Japan, the two largest overseas buyers of U.S. bonds, especially China, which has continued to sell U.S. bonds with a very resolute attitude.
At the end of 2021, China's holdings of U.S. bonds still exceeded $1,000 billion, but at the beginning of 2022, the balance of U.S. bonds fell below $1,000 billion for the first time with the continuous sell-off.
Since then, the continuous sell-off has continued to fall below several round number mark, until now, it has fallen below $870 billion.
In less than a year, the cumulative net value of holdings exceeded $210 billion.
Obviously, China is "showdown" with the United States in this way, with the increasing international status of the RMB, China no longer needs the US bonds you hold, to enhance the credit of the RMB, on the contrary, China is constantly increasing its holdings, I believe that the basis of ** can increase the credit of the RMB.
Obviously, the U.S. debt is getting more and more troublesome right now.
Last week, Treasury yields broke through 5% for the first time in 16 years, with the six-month and one-year Treasury bonds now approaching 5%.
Short-term Treasury yields** are significantly faster, which has led to a wider inversion of the short-term and long-term bonds.
And, judging by the current Fed attitude, yields will continue. This one 31The $4 trillion U.S. Treasury market is likely to erupt into a nuclear crisis.
During this period, various economic data in the United States have been released, inflation has exceeded market expectations, and employment data and retail sales data have also shown that the economy is still in a state of overheating. The Fed has just reduced the rate hike to 25 basis points, and it is now likely to increase it again to 50 basis points when it raises rates in March.
Therefore, the speed of US Treasury yields may accelerate, and the risk of a thunderstorm has been brought forward again.