The US government debt trajectory is expected to lead to an increase in long-term yields, according to investment management firm PIMCO. The firm predicts that the rising levels of US government debt will put upward pressure on long-term interest rates.
PIMCO's analysis suggests that the growing debt burden of the US government will result in higher borrowing costs over the long term. This projection is based on the premise that as the government accumulates more debt, investors will demand higher yields to compensate for the increased risk associated with lending to a heavily indebted entity.
