Fixed income investors face significant challenges in 2024, particularly concerning the maturity of nearly $3 trillion in U.S. debt expected in 2025, largely in short-term notes. The Treasury plans to lengthen this debt’s duration, which could complicate the market amidst a projected $2 trillion budget deficit. Strategas Research Partners warns that the cumulative effect of ongoing trillion-dollar deficits could strain T-bill issuance, currently at $2 trillion excess in a $28.2 trillion market. Treasury Secretary Janet Yellen has faced criticism for high bill issuance aimed at keeping financing costs low. Market conditions remain precarious following rising yields and substantial new issuance.
