Have you ever seen a picture that just put a pit in your stomach?

(the chart below has my gut in knots for many Americans that have not approached this appropriately)

Recently, the U.S. Treasury has ramped up its issuance of Treasury bonds and bills, surpassing the levels seen during the pandemic.

This surge in bond issuance is driven by the need to finance government spending and manage the national debt. While Treasury bonds are generally considered a safe investment, this unprecedented increase in supply can have several impacts on the economy and, by extension, your retirement savings.

Issuances of US Treasuries are now at pandemic levels:

We saw nearly $7 trillion in gross issuances of US Treasures in just 3 months during 2023.

For the entire year of 2023, a whopping $23 TRILLION in US Treasuries were issued.

US federal debt is rising by $1 trillion every 90 days right now.

US government spending as a percentage of GDP is at World War 2 levels.

Here’s what you need to know:

1. **Interest Rates and Bond Yields**: As the Treasury issues more bonds, the increased supply can lead to higher interest rates. Higher yields on new bonds mean lower prices for existing bonds, potentially affecting your bond portfolio’s value.

2. **Inflation Concerns**: The influx of new bonds could contribute to inflationary pressures. Inflation erodes purchasing power, which can significantly impact the value of your retirement savings and income.

3. **Market Volatility**: Increased government borrowing can lead to greater uncertainty in financial markets. Stock and bond markets may experience heightened volatility, which could affect the performance of your retirement accounts.

4. **Long-term Economic Impact**: Persistent high levels of government debt may lead to long-term economic challenges, influencing everything from interest rates to economic growth, and thus, your overall retirement strategy.

Given these developments, it’s crucial to reassess your retirement plan to ensure it’s resilient in the face of these changes. Diversifying your investments, considering inflation-protected vehicles, and staying informed about economic policies can help mitigate potential risks.

If it helps you, we can explore strategies to safeguard your financial future in these uncertain times.

Please don’t hesitate to reach out if you have any questions or need further information. Your financial well-being is our top priority.