U.S. Fiscal Deficit Expected to Rise Amid Tax Cuts

According to Odaily, Arif Hussain, head of fixed income at T. Rowe Price, has indicated that the passage of U.S. President Donald Trump's 'Beautiful Bill' is expected to increase the fundamental deficit in the United States, thereby exerting pressure on the long end of the Treasury yield curve. Hussain stated that the tax cuts will keep the U.S. fiscal deficit at high levels for the foreseeable future, impacting the long-term Treasury yield curve. A qualitative consideration that could worsen the situation is the potential shift in the U.S. role as the 'global policeman.' This change may raise questions about foreign demand for the anticipated increase in U.S. Treasury issuance. In this context, T. Rowe Price suggests that 10-year and longer-term U.S. Treasuries may face significant pressure.