KEY POINTS
Monica Murphy
The U.S. deficit is already burgeoning and it’s set grow even bigger as lawmakers push for a second stimulus package to beat the pandemic fallout.
The additional costs of funding the package will have to be through issuing more U.S. Treasurys — but that raises the question of who will buy them. It comes amid new shifts in the geopolitical landscape, as China — previously the top purchaser of U.S. Treasurys — cuts its holdings, analysts pointed out.
“While the US economy is gradually healing, the costs of handling the pandemic are still stacking up,” wrote Kristjan Mee, a research and analytics strategist at asset manager Schroders.
He pointed out that the rolling 12-month U.S. budget deficit was close to $3 trillion as of the end of August, following the CARES Act — the first relief package aimed at tackling the pandemic which added over $2 trillion to the already large deficit…..More Here
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