US Treasuries to mature in New Year's $3 trillion...An alarm for the bond market

With the size of U.S. government bonds scheduled to mature in 2025 reaching $3 trillion, the large proportion of short-term bonds is a potential destabilizing factor in the bond market in the new year, CNBC reported.

The amount of government bonds issued by the U.S. Treasury between January and November 2024 was $26.7 trillion, a 28.5% jump from 2023. Many of the new bonds were short-lived bonds.

In particular, the ratio of short-term bonds among government bonds is estimated to be more than 20% at the usual level, as the size of U.S. government bonds due in 2025 reaches $3 trillion and the Treasury has increased the proportion of short-term bonds issued in recent years.

"This will be a bigger concern for the bond market this year than the fiscal deficit as the U.S. government converts short-term bonds into bonds with a maturity of five to 10 years," market analyst Stratigus warned.

Since issuing mid- and long-term bonds typically raises interest rates, the value of existing bonds can decline.