U.S. Debt Profile – 2/10/2010
Comment: We discussed the gross and net debt outstanding last week and the question came up regarding how much of the debt is long term v. short term and how does today compare historically. The chart below shows that the share of the federal debt that is longer than 10 years is at a 30 year low. Successful treasury auctions at the current low rates will not last forever therefore the cost of financing this debt may jump, especially considering the large projected budget deficits that will need to be funded. On the other hand if risk aversion comes back, yields may stay low as investors pile back into less risky assets like U.S. Treasuries.