Critical risks of US debt are highlighted, as expanding deficits may force new bond issuances to increase interest rates.

Chairman Chris Iggo of AnSheng Investment Management Investment Research Institute pointed out in a report that the key risk facing US Treasury bonds is that, as the fiscal deficit expands, new bond issuances may require higher face interest rates to attract more buyers. He stated: This will push up market yields and depress existing bond prices, leading to negative price returns in bond investment portfolios. Iggo further added that foreign investors in US Treasury bonds are also worried that the real value of their assets may shrink due to high US inflation and further weakening of the US dollar. Despite the unconventional policy direction in Washington, there is currently no sign that the US will resolve inflation problems related to debt and fiscal sustainability through monetary means.