41. A plan to cut the U.S. budget deficit could drive Treasury yields down by curbing supply of government debt. 42. A lower average yield indicates investors are willing to earn less interest to hold government debt. 43. A lower budget deficit helps reduce borrowing costs by reducing the supply of government debt, thus generally boosting U.S. bond and stock prices. 44. A reduction in U.S. government debt would ease pressure on the Federal Reserve to raise interest rates. 45. Advocates say the state would profit from a windfall of federal money that now goes to pay interest on a massive government debt. 46. After years of trying to prime the pump, government debt has also soared. 47. Brazil said it will allow banks to swap their Brady bonds for new Brazilian government debt, to help troubled banks pay back their domestic creditors. 48. Bundesbank officials also fear the existence of shorter-dated government debt could incite politicians to resist rate increases that would, for example, derail budget plans. 49. Burdened by steep government debt and political tension, Canada has watched its dollar slip dramatically against the greenback recently. 50. But an increase in supply, caused by an auction of new government debt, put the most pressure on bond prices. |