Demand for US Debt Faces Worst ‘Technical Environment’ in Our Lifetime

It has been just reported the fact that the rising demand for US debt is facing the worst technical environment in our lifetime. Check out the latest reports about this below.

In a recent interview with CNBC Television, billionaire investor Bill Ackman has raised concerns about the imbalance between buyers and sellers of US government bonds.

Ackman warns that the Federal Reserve may make sudden changes to its benchmark interest rates due to various factors.

He further suggests that the US bond market appears unstable as major foreign holders of government debt are selling off their Treasury reserves.

“I think there’s, even in the relative short term, there are a number of reasons why rates can move a lot.

Among them, we have a government shutdown. We’re going into a highly probable government shutdown. We’re going to have a data shutdown.

All these little government agencies that put out data that the Federal Reserve relies on to decide whether to adjust interest rates, they’re going to lose access to that data so kind of a dark period.”

He continued and said:

“We have probably the worst technical environment in our lifetime for the supply of bonds versus buyer bonds. We have China selling. We have Russia, to the extent they own US securities and more, selling. We have Saudi Arabia selling.

We have an economy that is still strong and inflation at 3.5% to 4% and persistent.”

According to recent figures released by the U.S. Treasury Department, China’s ownership of Treasury securities decreased from $835.4 billion in the beginning of July to $821.8 billion by the end of the month – resulting in a decline of $13.6 billion.

The data also reveals that several other countries, including Saudi Arabia, the United Arab Emirates, and India, have reduced their Treasury holdings.

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