US still shows no signs of addressing debt mountain
Mixed messages from the Obama administration regarding the nation’s public debt burden indicate that any immediate commitment to address the deficit may have been sacrificed on the altar of economic growth. Credit looks at the US’s attempts to tread the fine line between ensuring economic stability and avoiding a hike in debt servicing costs.
Bond investors punished Europe’s weaker sovereigns and banks alike in 2010, but the US remained an enviable safe haven. Treasury yields were depressed for much of the year, while real GDP growth ran at 2.9%, according to the Bureau of Economic Analysis, well above the Eurozone’s 1.7% rate (as projected by Eurostat).
The US remains the largest bond market and the dollar the world’s reserve currency
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