Sovereign bond sales are set to increase further next year as budget deficits swell across the developed world. Unfortunately, that coincides with central banks accelerating the reduction of the bond holdings accumulated through quantitative easing. This double whammy means bond yields, particularly at the longer end of the curve, are set for a difficult 2024.

Something may have to give, as investor demand has proven to be decidedly fickle this year. The Federal Reserve, the European Central Bank and the Bank of England may have to curb their enthusiasm for shrinking their balance sheets if government borrowing costs extend the increase that saw the average 10-year yield among Group of Seven nations surge past 3.5% this year, more than double its five-year average.

QOSHE - The World Faces a Tsunami of Government Debt - Marcus Ashworth
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The World Faces a Tsunami of Government Debt

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21.11.2023

Sovereign bond sales are set to increase further next year as budget deficits swell across the developed world. Unfortunately, that coincides with central banks accelerating the reduction of the........

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