0551 GMT - U.S. deficit and debt are perennial focal points for international investors, say Deutsche Bank strategists in a note. However, they now have increased salience given concerns over U.S. economic policy and investor interest in allocating away from U.S. dollar assets, they say. "A fiscal package this summer that confirms our baseline expectation of no material deficit reduction could catalyze renewed term premium increases, though median dealer forecasts for the deficit and unemployment rate are broadly in-line with our own," they say. Term premium is the extra yield investors demand to hold a long-dated bond rather than a short-dated one. Meaningful effort to bring the deficit below 6% of GDP would encourage markets, while reliance on unorthodox channels to loosen fiscal policy while projecting lower deficits could reinforce concerns, they say. (emese.bartha@wsj.com)
(END) Dow Jones Newswires
May 07, 2025 01:51 ET (05:51 GMT)
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