NEW YORK (Reuters) – The U.S. Treasury market remains orderly and U.S. government bonds remain liquid safe-haven assets, a spokesperson at the International Monetary Fund said on Thursday, adding the Fund was monitoring tax plans taking shape in Congress.
Long-term U.S. government bond yields have been rising sharply this week after a downgrade of the U.S. credit rating by Moody’s and as Republicans discussed a sweeping tax package that analysts said could add trillions to the U.S. sovereign debt pile.
“Although there has been some volatility in markets, market functioning, including in the U.S. Treasury market, has so far been orderly,” the IMF’s director of communications, Julie Kozack, told reporters on Thursday.
The Republican-controlled U.S. House of Representatives on Thursday passed a sweeping tax and spending bill by a single vote which would enact much of President Donald Trump’s policy agenda. It will add about $3.8 trillion to the federal government’s $36.2 trillion in debt over the next decade, according to the nonpartisan Congressional Budget Office.
“We will look to assess a final bill once it has passed through the Senate and also once it’s been enacted,” said Kozack.
She added a trade breakthrough between the United States and China earlier this month could improve global economic growth prospects, despite continued uncertainty.
“The reduction in tariffs and the easing of tensions does provide some upside risk to our global growth forecast,” she said. “All of this said, of course, the outlook, the global outlook in general, does remain one of high uncertainty, and so that uncertainty is still with us.”
(Reporting by Davide Barbuscia; Editing by Andrea Ricci)
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