Tuesday, 02 January 2024 12:17 GMT

$39 Trillion US Debt Timebomb No-One Is Talking About


(MENAFN- Investor Ideas) (Investorideas Newswire) a go-to platform for big investing ideas, including gold and energy stocks issues market commentary from deVere.

Soaring US national debt – more than $39 trillion and growing - is the huge issue no-one is talking about, but it's a looming problem that could hit markets, borrowing costs, currencies and confidence across the global financial system.

This is the stark warning from the CEO of deVere Group

Fresh geopolitical turmoil has added to the pressure. Escalating tensions involving Iran have already unsettled markets, driven oil prices higher and triggered volatility in US Treasuries, exposing underlying fragilities in the system.

Official projections underline the scale of the challenge. The federal deficit is expected to remain close to $2 trillion, while annual interest payments are projected to reach around $1 trillion and continue rising sharply in the years ahead.

At the same time, the overall debt burden is forecast to climb significantly as a share of the economy over the next decade.

Recent moves in rates markets underline the point. Treasury yields have climbed sharply in recent weeks, pushing borrowing costs higher across the economy, while mortgage rates have risen to their highest levels in months, weighing on housing activity and demand.

There are also emerging signs of strain in demand dynamics. Foreign holdings of US Treasuries have shown periods of decline, while market liquidity has become more fragile during bouts of volatility, raising concerns about how smoothly future issuance can be absorbed.

The issue reaches well beyond the bond market. Persistent heavy borrowing and rising interest costs can keep upward pressure on yields, complicate the outlook for growth and place the dollar under longer-term strain if confidence in the fiscal path weakens.

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