“大而美”法案过了，美债市场“供应洪流”也来了！

Group 1: Core Points of the Legislation - The legislation combines tax cuts, spending reductions, and an increase in the debt ceiling, described as a "fiscal magic" balancing act [5][6]. - Tax cuts are extended permanently, with an estimated reduction of $4.5 trillion in federal revenue over the next decade [7]. - Significant cuts to public spending are expected, with an estimated savings of $1.1 trillion, impacting programs like Medicaid and green energy subsidies [8][9]. Group 2: Debt Management Strategy - The legislation raises the federal debt ceiling by $5 trillion, temporarily alleviating concerns of a technical default [10]. - The Congressional Budget Office (CBO) projects an increase in national debt by $3.4 trillion over the next decade, reaching $39.6 trillion by 2034 [10]. - Issuing short-term debt is seen as a cost-effective strategy, with current short-term bond yields lower than long-term bonds [11][12]. Group 3: Market Implications - The supply of short-term bonds is expected to increase significantly, potentially rising from 20% to 25% of total outstanding debt [13][14]. - Despite concerns about oversupply, market confidence remains strong due to high demand from money market funds and attractive real yields [15][16]. - The Federal Reserve is viewed as a safety net, providing additional confidence to investors regarding short-term bond stability [16].