Government Debt

Europe can take advantage of King Dollar’s wobble

24 Apr 2025

US President Donald Trump’s policies have weakened the greenback, offering the euro an opening to take its place as the world’s reserve currency. A $34 trln banking system plays to Europe’s favour. All that’s needed is more joint debt to create safe assets to rival Treasuries.

How Trump’s tariff turmoil scarred global markets

17 Apr 2025

Stocks and government bonds have steadied following dramatic falls triggered by the US president’s trade war. But the policy may yet do lasting damage. In this Viewsroom podcast, Breakingviews columnists examine the possible long-term effects on US Treasuries and the dollar.

State fiscal aid is harder call in 2025 than 2020

16 Apr 2025

Spain, Canada and South Korea are planning to prop up sectors hit by US levies. The damage will be less severe than five years ago, when Covid-19 led GDP to shrink by 3%. But high levels of debt and tariff uncertainty make it tough for states to know when and how to intervene.

Tariff chaos leaves its mark on US debt costs

14 Apr 2025

Ten-year Treasury bonds yield over 4.4%, up from less than 4% barely a week ago. Forced selling and liquidity woes don’t help, but overseas investors also appear to be rethinking their exposure to the US. That’s a scary prospect for Uncle Sam as trade uncertainty drags on growth.

Banks are dubious savior for US government debt

9 Apr 2025

The 10-year yield stayed high at 4.3% after a tariff pause. It adds urgency to Treasury Secretary Scott Bessent’s quest to relax capital rules so that lenders can buy more bonds. The timing, with investors fleeing, flags the risk. SVB found that safe assets can cause problems.

Stingy Uncle Sam subverts both suppliers and state

18 Mar 2025

Abrupt spending cuts and pressure to justify existing deals are wreaking havoc on US government contractors from Lockheed to Pfizer. Some $760 bln of annual outlays are at risk, spooking investors. Worse, frugality threatens to impair national strategic capabilities for decades.

US budget botches subtraction and multiplication

27 Feb 2025

Republicans are trying to preserve $4.5 trln of tax cuts by slashing government spending. The healthcare, food assistance and revenue collection programs being targeted, however, punch far above their weight economically. Higher debt and slower growth will only spook bond buyers.

Sticky inflation is a quagmire for tariff plans

12 Feb 2025

A surprisingly high 3% annual rise in US prices threatens to halt interest rate cuts from the Federal Reserve, and that’s before new tariffs go into effect. Policymakers seem to see gutting spending as the preferred fix. Scrapping inflationary trade barriers is a better bet.

Half-baked budget leaves France vulnerable

10 Feb 2025

Prime Minister François Bayrou managed to ram his finance bill through parliament. Bond investors look relieved, but with a deficit at 5.4% of GDP, France’s government still can’t control a rising debt load. It may need more market pressure to get serious.

Uncle Sam’s debt offers flimsy refuge to investors

6 Feb 2025

Yields on 10-year US government bonds have dropped amid signs of slowing growth and President Donald Trump’s tariff talk. But the safe haven faces threats from $8 trln in unfinanced tax cuts, inflation, and Elon Musk’s meddling with payment systems. The calm is unlikely to last.

India’s tax cuts grasp at a fleeting growth fix

3 Feb 2025

By hiking the income-tax exemption threshold, Narendra Modi’s government hopes the middle class will go out and spend. But that leaves the state relying on 1% of the working age population to help pay its bills. It throws the urgency to tackle stagnant wages into sharp relief.

Excessive belt-tightening risks choking US economy

28 Jan 2025

A budget edict citing 'wokeness' and 'transgenderism' claims to temporarily freeze $3 trln in federal grants and loans. Chipmakers, small business owners and medical researchers are among those probably affected. If no one stops the overreach, the consequences may be dangerous.

Bond bulls put Beijing on the horns of a dilemma

28 Jan 2025

The relentless plunge in yields allows China to issue debt inexpensively to stimulate its $18 trln economy, but it also reinforces expectations of slow GDP growth, a weak yuan and the People’s Republic as a low-interest-rate country. Managing that tension is getting riskier.

Davos presents elites with economic Rorschach Test

27 Jan 2025

Delegates in the Swiss ski resort hailed Donald Trump’s deregulatory plans and got starry-eyed about AI. Others worried about inflation, debt, and fossil fuels, while Europeans bemoaned their back yard. Assessing the “mood in Davos” reveals more about the observer than the world.

US Treasury pick pushes contradictory tariff cure

17 Jan 2025

Scott Bessent sees import fees of 10% or more as a surgical tool to combat everything from China’s military rise to climate change, but also a long-term deficit fix. Wall Street might have hoped for orthodoxy from the hedge funder, but he’s inviting a protectionist trap.

Bond chaos induces headaches worldwide

16 Jan 2025

Rising yields on long-term US debt, now around 5% despite the Fed’s cuts, are having ripple effects across the globe. Leaders in Britain and beyond may be forced to rethink their policies. In this Viewsroom podcast, Breakingviews columnists explain the potential pain in store.

Cracks in India’s consumption story run deep

16 Jan 2025

Wages of its giant workforce are stagnating, dragging down growth in the $4 trln economy. Authorities can cut taxes or ease the flow of credit to stimulate spending. It will, though, cut the financial stability that underpins the emerging market’s moment.

Trump’s agenda already faces irresistible forces

8 Jan 2025

With his party in legislative control, the US president-elect is promising action on an $8 trln tax plan, immigration and energy. But with long-term bond yields spiking to 5% even after central bank cuts and congressional dysfunction looming, he might be stymied from the start.

Donald Trump will meet his match in bond markets

18 Dec 2024

The president-elect’s bullying and bluster may steamroll any political resistance to tax cuts and tariff hikes. Like many world leaders before him, though, he’s about to feel the punch that debt buyers pack. They’ll beat back an inflationary agenda that imperils US finances.

China’s wealth pledge will face tough sceptics

10 Dec 2024

In a key meeting, Beijing identified stabilising stock and property prices as a top task in 2025. It recognises that people will spend more if they feel rich. This implies a policy bottom for both markets. Yet observers are forecasting a huge range of outcomes in the coming year.