The debt burden of the United States has been increasing at a faster rate in recent months, with approximately $1 trillion being added every 100 days.
According to data from the U.S. Department of the Treasury, the nation’s debt surpassed $34 trillion on January 4th, after briefly exceeding this milestone on December 29th. This marks a significant acceleration, considering it reached $33 trillion on September 15, 2023, and $32 trillion on June 15, 2023. Before this, the journey from $31 trillion to $32 trillion took about eight months.
The U.S. debt, representing the funds borrowed by the federal government to cover its operational expenses, currently stands at nearly $34.4 trillion as of Wednesday. Michael Hartnett, an investment strategist at Bank of America, predicts that this pattern of a $1 trillion increase every 100 days will persist, with the debt likely moving from $34 trillion to $35 trillion.
“Little wonder ‘debt debasement’ trades closing in on all-time highs, i.e. gold $2077/oz, bitcoin $67734,” he wrote in a note Thursday.
Spot gold is currently hovering around $2,084 an ounce, while bitcoin was recently around $61,443. The cryptocurrency in February closed out its best month since 2020, briefly trading above $64,000 on Wednesday before pulling back. Inflows into crypto funds are on course for a “blowout year,” with an annualized inflow of $44.7 billion so far this year, Hartnett noted.
Moody’s Investors Service lowered its rating outlook on the U.S. government to negative from stable in November due to the rising risks of the country’s fiscal strength.
“In the context of higher interest rates, without effective fiscal policy measures to reduce government spending or increase revenues,” the agency said. “Moody’s expects that the US’ fiscal deficits will remain very large, significantly weakening debt affordability.”
