Following the sharp rise in median yields at today's Treasury auction for the 1-year bill, its yield rose modestly in today's market auction: from 4.66 percent yesterday to 4.75 percent today. This means that the market pays $106.74 in yield for every $100 earned at the auction. This disparity is higher than yesterday, when it stood at 104.72:100, but significantly smaller than it was in the week of October 18-25, when the yield disparity averaged 117.9.
Overall, there was very little movement in market yields on Tuesday:
Table 1
Source: U.S. Treasury
Based on our forecasting model for the U.S. debt, we make the following predictions of the cost of the debt for the entire FY2023:
- Static prediction, $624.7 billion;
- Dynamic prediction, $841.9 billion.
Both predictions are based on a sample of the U.S. debt equal to 65.95 percent of total debt. The static prediction is based on the following assumptions: the current average interest rate on all U.S. debt stays unchanged at exactly 2.00 percent; and the debt does not increase beyond $31,239.2 billion. The dynamic prediction is based on the assumptions that the rise in debt and in the average interest-rate cost of that debt in October, accurately predict the rise in the debt as well as the interest-rate cost for the remainder of FY2023.
Both forecasts are meant to predict the fiscal impact of the U.S. debt, not financial yields to creditors of the U.S. government.
---
We do not give investment advice.
This blog provides analytical information solely for the purposes of 1) predicting the cost of the federal debt, and 2) for assessing the risk for a U.S. fiscal crisis. All information published here, forecasting and other, is based on publicly available data from the U.S. Treasury, including but not limited to approximately 65 percent of the current debt; on macroeconomic data, including but not limited to monetary policy decisions by the Federal Reserve; and on macroeconomic theory.
No comments:
Post a Comment