US treasury yields rose on Wednesday after weak demand for a $16bn 20-year treasury auction.
The yield on 30-year treasuries touched 5.1% following the auction, which came days after Moody’s downgrade of the US’s credit rating.
The rating agency citing concerns over the country’s mounting debt pile.
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The sale also came ahead of a vote on the Trump administration’s tax and spending bill, which is likely to add trillions to the nation’s $36.2trn debt. The bill was passed in the US House of Representatives today (22 May).
“Bond investors are far from impressed by the proposals which would extend Trump’s 2017 tax cuts and boost military spending but cut welfare payments,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
“The congressional Budget Office has forecast the proposals would add $3.8trn to the US’s $36.2trn debt mountain over the next decade.
“An auction of 20-year Treasuries saw very weak demand, indicating the wariness about White House policy.”