Billionaire Bill Ackman Warns of Imbalance in US Bond Market
Billionaire investor Bill Ackman is raising concerns about the state of the US government bond market, pointing to an imbalance between buyers and sellers. In an interview with CNBC Television, Ackman highlighted several factors that could lead to abrupt changes in benchmark interest rates by the Federal Reserve.
One major issue, according to Ackman, is that top foreign holders of US government debt are selling off their Treasury securities. He also mentioned the possibility of a government shutdown and a data shutdown, which would limit access to important information used by the Federal Reserve to make decisions about interest rates.
Ackman emphasized that the current supply-demand dynamics for bonds are unfavorable, with China, Russia, and Saudi Arabia among those reducing their Treasury holdings. Additionally, he noted that inflation remains persistent and relatively high.
Foreign Holders Decreasing US Treasury Holdings
The latest data from the US Treasury Department reveals a decline in China’s holdings of Treasury securities from $835.4 billion in July to $821.8 billion at the end of the month. This decrease amounts to $13.6 billion. Other countries such as Saudi Arabia, the United Arab Emirates, and India have also reduced their holdings of US Treasuries.
Hot Take: Concerns Over US Debt Demand
Billionaire investor Bill Ackman has expressed worry about the current state of the US bond market, highlighting an imbalance between buyers and sellers of government bonds. He cited potential factors such as a government shutdown and limited access to crucial data as reasons for possible abrupt changes in benchmark interest rates by the Federal Reserve. Additionally, he pointed out that major foreign holders of US Treasury securities are selling off their holdings. These concerns raise questions about the demand for US debt and the overall stability of the bond market.
By
By
By
By
By
By