Gov't bond issuance to jump more than 50%

U.S. government bond issuance will jump more than 50% in the third quarter due to a larger-than-projected 2008 federal budget deficit, according to a report from the Securities Industry and Financial Markets Association’s government securities, research, analysis and strategy committee. Net new issuance of Treasury coupon securities is projected to hit $82.5 billion in the third quarter, compared with $53.3 billion in the second quarter and $23.2 billion in the third quarter of 2007. The report from SIFMA of New York and Washington forecasts an increase in the federal budget deficit this year to $425 billion, from $168 billion in 2007. “Slower economic growth has begun to moderate tax receipts, which puts pressure on the government’s fiscal position and on spending programs, causing a rise in the deficit and increased borrowing,” Rob Toomey, SIFMA’s managing director and staff adviser to the government securities, research, analysis and strategy committee, said in a statement.