9 Apr 2025: Invest in US Treasury note, T 4.250% 31Dec2025 Govt at 3.9%

Investment Idea: T 4.250% 31Dec2025 (USD)

Ask Yield: 3.9%

Ask Price: 100.22

Issuer: United States Treasury

Coupon: 4.25%

ISIN: US91282CJS17 

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

Bond Credit Rating: AA+ (Fitch), Aaa (Moody's)

Outstanding Issue Size: USD 57.0 Billion

(5 Feb 2025) The US Government Accountability Office (GAO) found that the US is on an unsustainable fiscal path that poses serious economic, security and social challenges if not addressed. A sustainable fiscal policy would lead to debt held by the public growing at the same - or slower - rate than the economy. An effective fiscal strategy incorporate well-designed fiscal rules and targets to help manage debt, for example by controlling factors such as spending and revenue to meet a debt-to-GDP target.

• Assess the drivers of the primary deficit, such as mandatory and discretionary spending and revenue.

• Address financing gaps for Social Security and Medicare. Both programs are supported by trust funds that will be depleted in 8 and 11 years, respectively, according to projections.

• Pursue opportunities to improve fiscal responsibility through efficiencies; better program management to reduce fraud, waste, and abuse, as well as improper payments; better addressing a yawning tax gap; and reducing costly tax expenditures.

• Consider replacing the current debt limit.

Why Invest in US Treasury notes?

1. Countries are retaliating against the US, weakening further sentiment

2. Short-term high quality bonds such as US Treasuries will be in demand

3. The Fed may cut rates preemptively to stem the sell-off in US Treasuries

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