The US Treasury is selling $74 billion of debt this week to fund the rising budget deficit stemming from the Trump administration’s massive tax cut introduced last December and the country’s massive overall debt.
The new debt will be issued in a three-year, 10-year and 30-year bond supply this week, Reuters reports, quoting US Treasury data. In late September, the Treasury sold a combined $106 billion of debt amid cooling demand from investors.
With countries like Japan, China, Russia and Turkey buying less and selling more US debt, foreign purchases at Treasury auctions have slowed down. One of the reasons is the trade war between the US and China, which has given a boost to the dollar. Bond dealers have been buying more US debt, but they quickly resell it to make a profit.
Last week’s data shows that the US budget deficit soared to an estimated $782 billion in Donald Trump’s first full fiscal year as president. This is the largest fiscal deficit for the US since 2012.
There are concerns that US debt is growing out of control. America’s debt currently stands at $21.5 trillion, while the Treasury said the US government paid $523 billion in interest in fiscal 2018, the highest on record.
Trump will soon announce a plan to tackle the debt, according to the US president’s chief economist Kevin Hassett. “The deficit is absolutely higher than anyone would like. As you watch our next budget come out – and you’ll start to see things in the next few weeks – then you’ll see a much more aggressive stance” in tackling it, he said, as quoted by Bloomberg.