Dec
30th
Wed
30th
Government is picking up the corporate tab.
Who’s buying Treasuries? Despite rising issuance, almost half of the increase in Treasury supply of $1.89 trillion over the past 12 months, or $889 billion, was purchased by non-U.S. investors. Will foreign investment continue to support the Treasury market to the same degree in 2010 in the face of rising issuance? The answer remains unclear, particularly given the low level of Treasury yields and upcoming surge in government borrowing.
Net fixed-rate Treasury issuance this year should approach 10% of nominal GDP. By comparison, net non-financial corporate bond issuance will likely be less than 1% of nominal GDP.
