reuters.com - US debt crosses trillion threshold after doubling under trump biden

The Treasury's latest daily cash and debt balances statement showed total public debt outstanding at $40.047 trillion on Tuesday, a total that includes Treasury securities held by the public ‌of $32.266 trillion and intra-governmental debt holdings of $7.782 trillion.

The federal government's IOU has now more than doubled in less than a decade, from $19.95 trillion when President Donald Trump was sworn in for the first time in January 2017. Roughly one-third of that increase occurred during two years of frantic government borrowing to fund the COVID-19 pandemic responses undertaken by Trump and former President Joe Biden, while the fiscal policy choices of both presidents combined with long-running tax-and-spending imbalances to account for the rest.

reuters.com - US treasury double sizes some debt buyback operations least billion

The U.S. Treasury on Wednesday announced a doubling of buyback sizes for ​10- to 30-year Treasury debt securities to at least $4 billion per operation, staunching at least temporarily a weeks-long upward march in yields that had unnerved global investors.
The increase from ‌previously planned $2 billion buybacks will apply to the 10-year to 20-year sector and the 20-year to 30-year sector and will be effective September 9 through November 4, the department said in a statement.

reuters.com - Global markets global markets

Longer-dated global bond yields retreated from multi-decade highs, the dollar tumbled and gold jumped on ​Wednesday after the U.S. Treasury Department said it would boost liquidity support for longer-dated securities, following a broad selloff fueled by fears over swelling sovereign debt.

Tariff Impact on SNB Policy: Economists and financial institutions (such as Swissinfo) have noted that heavy U.S. tariffs on Swiss exports create economic headwinds for Switzerland. These trade barriers put pressure on the Swiss National Bank (SNB) to consider driving interest rates back into negative territory to prevent excessive strengthening of the Swiss franc and support local exporters.

cnbc.com - Trump bemoans fed interest rate policy says US should be paying much less

President Donald Trump on Wednesday expressed frustration that the Federal Reserve isn’t cutting interest rates, insisting that solid economic data shouldn’t stop the central bank from adopting an easier policy stance.

Trump also complained about where the U.S. stands compared to some of its global competitors. Specifically, he cited Switzerland, which has its benchmark rate anchored around zero as the nation battles the opposite problem that U.S. has faced — very low inflation rates and an unusually strong safe-haven currency.

“I see countries like Switzerland where they’re the number one lowest interest rates, a half a percent, and we pay three and a half percent,” he said. “I have the absolute right to cut off all business with a country like Switzerland.”

At the same time, Trump said he doesn’t think the U.S. has a bond market problem, despite what he considers unfairly high rates.

The thought dawned on me that a reasonably way to increase your effective interest rate is to borrow money in Switzerland and buy high interest Japanese bonds, covering the currency risk by a futures contract. Seems a low risk way to leverage a clear arbitrage opportunity.

Jeff
(In Copenhagen tomorrow)