Anthony Gutman, co-chief executive officer of Goldman Sachs International, said on Monday that a more stable policy backdrop, including reduced government spending and strong economic growth, is needed to contain soaring borrowing costs.
Speaking on CNBC’s “Squawk Box Europe,” Gutmann highlighted the recent turmoil between U.S. and French government bonds, saying rising government bond yields are a challenge for all Western countries.
“We all know what’s causing it. We look at energy costs and the labor market. But fundamentally, what does it take to solve this problem? We need lower budget deficits and more sustainable economic growth,” Gutmann said.
US 10 year government bond.
U.S. Treasury yields rose even though September nonfarm payrolls were lower than expected on Friday. of 10 year Treasury bill Finally, the yield fell by 1 basis point on Monday to 5.2581%.
french 10 year government bond rose more than 1 basis point to 4.8812%.
Gutmann told CNBC’s Steve Sedgwick that “there are always tradeoffs” for governments, but warned that the prevailing fiscal conditions are making it “more difficult” to address these issues.
French 10 year government bond.
At the same time as Spanish Prime Minister Pedro Sánchez announced plans for a snap election on November 29, Gutmann warned that the European election cycle was creating policy uncertainty and further instability for businesses.
“But what I’m hoping for is a combination of lower spending and higher growth that will give us all some peace of mind.”
