Demand for Treasuries Enough to Absorb Supply, Goldman Says

Bloomberg reports:

Demand for Treasuries will be sufficient to absorb the record amount of debt the U.S. is selling amid a $12.8 trillion pledge by policymakers to combat the recession, according to Goldman Sachs Group Inc.

Purchases by foreign investors will be augmented by appetite from U.S.-based buyers looking to add to savings or increase the duration of their assets, Michael Vaknin, an analyst for Goldman Sachs in London, wrote in a note today.

President Barack Obama has pushed U.S. marketable debt to an unprecedented $6.78 trillion as the government seeks to revive the world’s biggest economy. Billionaire investor Warren Buffett said it may pose a threat as ominous as the crisis itself. The Federal Reserve has more than doubled the size of its balance sheet in the past 12 months to $2.02 trillion by buying Treasuries and other securities to unlock credit markets.