Moody's Highlights Strong Structural Demand for US Debt Amid Treasury Market Volatility

According to Yahoo News, Moody's Investors Service stated on Monday that the structural demand for U.S. debt, which supports the dollar-based global financial system, remains robust despite recent Treasury market volatility. The credit rating agency noted that U.S. financial regulators have implemented a series of measures to enhance Treasury market resilience and efficiency, and it anticipates that the market structure will continue to evolve. Moody's added that as the Federal Reserve reduces its Treasury holdings, foreign central banks, pension funds, insurance companies, and households will serve as stabilizing factors in the market. Earlier this month, Moody's downgraded its outlook on the U.S. credit rating from 'stable' to 'negative,' citing significant fiscal deficits and a decrease in debt affordability. Investors have become increasingly concerned about federal spending and political polarization, leading to a selloff that pushed U.S. government bond prices to their lowest levels in 16 years in mid-October. Treasury yields have surged this year due to expectations that the Federal Reserve will maintain tight monetary policy and concerns about U.S.-focused fiscal issues.