Bond Crisis Not Over

Dongwu Securities' Chen Li believes U.S. Treasuries will not go unsold. There is no shortage of buyers for U.S. debt; what is lacking are buyers willing to take over at lower prices. The fiscal deficit has accumulated to nearly $1.8 trillion this year, and buybacks are just a fraction of that, unable to absorb the deficit. Long-end rates are likely to continue grinding at highs—the bond crisis is not over, but has merely shifted into a quieter form of persistence.