The battered bond market starts 2025 facing some difficult issues about debt

Fixed income investors are facing challenges in 2025, with nearly $3 trillion of U.S. debt set to mature, including short-term notes that the Treasury Department has been issuing. The market may struggle to absorb this massive issuance as the government aims to lengthen the duration of its debt, potentially leading to concerns. Despite expectations for a decrease in the deficit next year, the focus remains on the need to transition excess Treasury bills to the five-to-ten-year portion of the curve, posing a significant worry for the market.

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