An increasing supply of U.S. debt to fund deficits coupled with a weakening demand points to higher interest rates in our future. Higher rates lead to lower asset values. and at A&M, our outlook is there may be more impairments in the coming months and years. Stay tuned as we share updates.
Bond traders have been keenly focused on who’s participating this year because the market is in an unusual situation: the Federal Reserve is raising rates at the same time that the nation’s budget deficit is widening. Without persistent demand from some of the biggest holders of America’s debt, borrowing costs are likely to climb -- meaning investors will see bond prices decline.