On Wednesday September 23, 2009, 12:45 pm EDT
By Burton Frierson
NEW YORK (Reuters) – The U.S. government will have issued $7 trillion in bonds by the time the current fiscal year ends next week, but it expects the debt deluge to stabilize by mid 2010, a Treasury official said on Wednesday.
Though markets and the economy are improving, efforts to provide a firm foundation for recovery will require increases to the U.S. Treasury’s conventional bonds going forward, as well as debt securities that are indexed to inflation.
However, this expansion may take place in an environment where investors consider leaving the safe-haven Treasury market for riskier assets, and debt issuance is likely to level off mid next year, said Treasury Acting Assistant Secretary for Financial Markets Karthik Ramanathan.
“In fiscal year 2009, which ends next week, Treasury will have issued $7 trillion in gross issuance — that’s in a 12-month period,” Ramanathan told a financial markets conference in New York.
“This issuance was necessary to meet nearly $1.7 trillion in net marketable borrowing needs, nearly $1 trillion more than what we raised last year,” he added.
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