Bond Market Relieved at Size of Obama Deficit Cut

[pnwmom]

Source: Reuters

(Reuters) - It lacked details, and quickly drew a crowd of critics across Capitol Hill, but President Barack Obama's $4 trillion deficit cutting plan won over a notoriously skeptical bond market -- at least for now.

Prices on U.S. government debt rose when news of Obama's plan trickled into the market before his speech on Wednesday afternoon as traders applauded the size of his deficit reduction package.

Traders said the president picked an ambitious goal that, if pursued, would require the government to sell fewer bonds in the future and keep the nation in good standing with creditors.

"It's a positive for bonds because it helps to preserve the triple-A credit rating of the United States," said Tom Simons, money market economist at Jefferies & Co in New York.

Read more: http://www.reuters.com/article/2011/04/13/businesspro-us-usa-bonds-obama-idUSTRE73C7ET20110413

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So even the bond market seems to support raising taxes on the wealthy!