The USA only took on $776 billion in debt in the fourth quarter - a record, but slightly lower than expected.

The USA only took on $776 billion in debt in the fourth quarter - a record, but slightly lower than expected.

According to a report from finanzmarktwelt.de, the USA will take on new debt worth $776 billion in the fourth quarter. This number is slightly lower than previously forecast and is a new record. The Treasury Department in Washington cut its estimate for U.S. federal borrowing for the current quarter, thanks to higher-than-expected revenues. This has resulted in bond market yields falling slightly. Nevertheless, the USA is obviously in a debt crisis.

The article also mentions that the US will borrow slightly less compared to many strategists' forecasts. Ten-year government bond yields also fell slightly following the announcement. The U.S. Treasury Department is expected to announce another round of hikes in its bond auctions next week. Still, a sizeable minority expects the ministry to slow the pace of growth to avoid a rise in yields.

The reduced forecast for fourth quarter debt is still a record. This is attributed, among other things, to the deferral of tax revenues from areas in California and other states that were affected by natural disasters. Yields on longer-dated U.S. Treasury bonds have risen since August, when the Treasury Department unveiled plans to increase issuance of the securities. Updated issuance plans are expected to be published soon.

The US Treasury Department is expected to announce further bond issuances in the coming weeks. The consensus forecast is for record volume of $114 billion, up from $103 billion three months ago. However, some strategists are predicting a smaller increase due to the jump in yields following the August announcement. The Treasury may prefer a smaller increase in the supply of longer-dated bonds and instead issue more shorter-dated bonds.

The rising US deficits and the Federal Reserve's program to reduce its government bond holdings are increasing financing pressure. A slowdown in the growth of banknote and bond auctions would expose the Treasury to the risks of over-reliance on banknotes. New issuances and reopenings of 10-year Treasury bonds are expected to rise by $3 billion.

Overall, the US is in an ongoing debt crisis due to its increasing borrowing, which may impact bond market returns and bond issuance.