…
A lower Treasury allocation for Norway’s Government Pension Fund Global would be offset by purchases of riskier fixed-income products, particularly debt such as mortgage-backed securities.
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These MBS are largely backed by government agencies, meaning Norway’s exposure to the risk of a US government default is only being reduced modestly. They do, however, offer slightly higher yields than Treasuries because of the risk that mortgages are repaid early” [1].
[1] https://www.ft.com/content/ecc15aa6-6e7b-409d-8753-2fb6aadd0...
"NBIM plans to increase its holdings of nongovernment U.S. fixed income, such as corporate bonds, to 27.6% from 16.2%.
CEO Nicolai Tangen and Norway’s central bank chief, Ida Wolden Bache, said the fund could earn higher premiums by diversifying into riskier assets, such as mortgage-backed securities, which they judge as well positioned to weather as a long-term investor."
[0] https://www.cnbc.com/2026/09/04/worlds-biggest-sovereign-wea...
The truth is we need to drastically shrink the size of the federal government. Its unbelievably inefficient.
Government tightening policy has always lead to spending being moved around, and combined with tax cuts that makes for larger deficits. Every single time.
What needs to be more efficient is the health insurance system. Pretty much any other civilized country could be looked at for inspiration. Then the military. Taxes needs to at least be kept intact and fiscal policy needs to improve.
The sad fact is that the political system makes the easy solution impossible. We know that after half a century. The open question is what the possible avenues are.
US taxes (state, federal, and local) are approaching 30 cents on every dollar, and that is with the Fed spending ~135% of revenues each year.
You might point out that many Europeans have higher taxes, and they do. However, they also have healthcare and generous national pensions. Americans have to pay for those after taxes. This makes it hard to freeze services and raise taxes.
The US has to get more efficient.
The GOP and DOGE tried that and the national debt has since skyrocketed due to corruption and illegal wars. So much for those $5,000 DOGE Dividend checks Elon and Trump were discussing.
Smaller federal government doesn't mean a less corrupt government, just a less useful government to the average American struggling to make ends meet.
> These MBS are largely backed by government agencies, meaning Norway’s exposure to the risk of a US government default is only being reduced modestly. They do, however, offer slightly higher yields than Treasuries because of the risk that mortgages are repaid early."
TLDR More yield for similar risk profile while pushing up mortgage rates over time (all US consumer debt is priced off of US treasury yields; less demand for treasuries will push up their yields). Watch the 10Y and 30Y curves for where the market thinks rates are going.
(think in systems)
Trump says he will cease trading with top partners unless Fed lowers rates - https://www.cnn.com/2026/09/04/economy/trump-trade-fed - September 4th, 2026
Unless their name is on every powerpoint slide in a large font.