The US Treasury reported a $432.3 billion deficit in July, the largest single-month shortfall since March 2021, driven by accelerated payments and rising interest costs. Year-to-date, the federal deficit stands at $1.799 trillion. The administration is considering new tax cuts, including inflation-indexed capital gains and expanded home sale exclusions, which could increase fiscal pressure. Investors are watching bond yields and Treasury statements closely, as rising deficits and potential tax cuts may impact long-term interest rates and market stability.
In 2023, bond investors have faced losses, with major bond ETFs like the iShares Core US Aggregate Bond ETF down 4% and the iShares 20+ Year Treasury Bond ETF down nearly 7%. Despite this, investors have poured a record $625 billion into bond ETFs an...
The article discusses the current attractiveness of the TLT ETF, which tracks long-term government bonds, amid elevated 20-year yields around 5.3%. These yields appear high compared to Federal Reserve inflation and neutral rate projections, suggestin...
