""That's a dangerous thing," he said Thursday during an interview with Bloomberg TV, describing a scenario where demand and prices for Treasuries fall as foreign interest in the market declines."
"It's no exaggeration to say Treasury securities underpin multiple parts of the global financial system, and are foundational to the way the U.S. government finances itself."
"Demand for securities is what informs Treasury yields, which serve as a benchmark for virtually every other borrowing cost ranging from mortgage rates to student loans."
"The Treasury market is also a haven asset. In times of crisis, investors around the world have historically piled into U.S. government debt precisely because it is considered the safest store of value on the planet."
The U.S. federal debt has reached $39 trillion, raising concerns about the country's ability to finance itself. This situation may undermine confidence in Treasury securities, which are vital for the global financial system and U.S. government financing. A decline in demand for Treasuries could lead to falling prices and yields, impacting borrowing costs across various sectors. Historically, Treasuries have been a safe haven for investors, but diminishing foreign interest poses a significant risk to their reliability and the dollar's status as the world's reserve currency.
Read at Fortune
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