7 Apr 2025: Invest in US Treasury bond, T 3.125% 15Aug2025 Govt at 4.0%

Investment Idea: T 3.125% 15Aug2025 (USD)

Ask Yield: 4.0%

Ask Price: 99.67

Issuer: United States Treasury

Coupon: 3.125%

ISIN: US91282CFE66

Issuer Credit Rating: AA+ (S&P / Fitch), Aaa (Moody's)

Bond Credit Rating: AA+ (Fitch)

Outstanding Issue Size: USD 63.6 Billion

(4 Apr 2025) The US CBO projects federal outlays to a total 23.3 percent of GDP this year, while revenues will come in at 17.1 percent. This compares to historical averages of 20.5 percent and 17.3 percent, respectively. Therefore, 71 percent of the 2025 deficit is attributable to spending policy decisions and 29 percent to tax policy decisions. In other words, the current US deficit problem is rooted in spending growth. A shortfall in tax revenues has played a smaller, but still notable, role.

Why Invest in US Treasury notes?

1. Tariffs are likely to boost US tax revenue and the fiscal profile of the US Treasury

2. While higher inflation may impact bond prices, the pressure will not be felt at the short end of the curve, such as short maturity US Treasury notes

3. The US is likely to keep an accommodative monetary policy in view of a weakened growth outlook

Contact us if you would like to find out more about investing in short term US Treasury bonds.