US Pays 5.22% on $25 Billion 30-Year Bonds as Debt Fears Threaten UK Recession
Updated
Updated · City A.M. · Aug 17
US Pays 5.22% on $25 Billion 30-Year Bonds as Debt Fears Threaten UK Recession
3 articles · Updated · City A.M. · Aug 17
Summary
$25 billion of 30-year Treasuries cleared at yields as high as 5.22% on Thursday, the highest long-dated US borrowing cost since August 2001.
Investors demanded the higher return amid concern over a $40 trillion US debt pile, widening deficits, sticky inflation and expansionary fiscal policy after Trump-era tax cuts.
City analysts warned a sharp Treasury sell-off could hit the UK with higher mortgage and corporate borrowing costs, potentially tipping its stagnant economy into a recession far worse than recent financial crises.
The shock could also raise UK government funding costs and pressure Chancellor John Healey to keep a tighter line in his first Budget on October 28.