US Fiscal Policy Will Lead To A Debt Catastrophe: Goldman
by Tyler Durden
ZeroHedge.com
Mon, 02/19/2018
Judging by how urgently Goldman’s research department is trying to get the bank’s clients to sell treasuries, Goldman’s prop traders must have a desperate bid for duration in anticipation of what probably will be a historic deflationary shock. It started a month ago when Goldman calculated that the US debt supply will more than double from $488bn to $1,030bn in 2018.
Then last Friday, Goldman revised its 10-year bond yield forecasts by around 20bp across the board – in part due to revised growth and inflation expectations – and now projects 3.25% for US Treasuries, 1.0% for Bunds, 2.0% for Gilts and 10bp for JGBs (the bank kept the peak level of Treasury yields in this cycle unchanged at 3.5-3.75%). Its full old vs new projection matrix is shown below:
The Rest…HERE
