The Final Countdown?
Ballooning Treasury Issuance and The Rising U.S. Debt

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Thomas Smith Tani Fukui Shan Ahmed
NOV 30, 2023
The Final Countdown?
Ballooning Treasury Issuance and The Rising U.S. Debt
DOWNLOAD PDF

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Key Takeaways:

  • U.S. publicly held debt is on an alarming path.
  • In every scenario that we examine, publicly held debt rises – up to 139% of GDP by 2029.
  • Annual net issuance is expected to remain four times as high as high as before the pandemic, raising questions about how easily markets can absorb the issuance.
  • Debt metrics are poor and projected to worsen; U.S. debt-to-GDP is far worse than Fitch’s AA-rated median and its interest-to-revenue ratio of over 10% is more akin to a BBB-rated country.
  • The probability of further downgrades and outlook revisions will increase significantly if drastic fiscal action is not taken.