Daily Management Review

FT: Investors are warning governments about high state debt levels


Investors are alerting governments throughout the world to the high levels of public debt, pointing out that pre-election disclosures of large borrowing risk could cause the bond market to respond negatively, writes the Financial Times.

Benoît Prieur
Benoît Prieur
Government bond issuance in the US and the UK is forecasted to hit all-time highs in 2024. The Institute of International Finance (IIF) reports that government debt in emerging markets reached a record 68.2% of GDP in 2023, prompting a rise in the issuance of government bonds by these countries.

Jim Cielinski, head of Janus Henderson's fixed-income instruments, said the deficit is "out of control, and the truth is that there is no mechanism to bring it back." He went on to say that this will be a big worry "over the next six to 12 months as something of great importance" for markets.

Estimates from Apollo Global Management indicate that the U.S. Treasury Department would issue $4 trillion in government securities with maturities ranging from 2 to 30 years in 2024, an increase from $3 trillion in 2023 and $2.3 trillion in 2018.

source: ft.com