The US economy has exceeded the Federal Reserve's estimate of its growth potential in recent years, with growth averaging 3% under President Joe Biden, but concerns about rising public debt and inflation, as well as the Fed's efforts to control them, may lead to slower growth in the future and potentially a recession. However, there are hints of improving productivity that could support continued economic growth.
The US government's debt has reached a record high of almost $33 trillion, causing concerns about its impact on the nation's finances and the risk of a debt crisis, according to experts like Larry McDonald, Ray Dalio, and Nouriel Roubini.
Despite President Biden's claims of cutting the federal budget deficit by $1.7 trillion, in reality, the deficit is projected to hit $2 trillion this year, with government spending remaining high and the reduction in the deficit primarily due to the expiration of COVID-19 emergency spending.
The U.S. debt is expected to reach $2 trillion this year, doubling from the previous year, due to a decline in global economic growth.
The U.S. economy is expected to expand at a 2.2% annual rate in the current quarter, according to a real-time estimate from the New York Federal Reserve, which is lower than the Atlanta Fed's estimate of 5.6% growth; the strength of the economy will impact the Federal Reserve's decision on interest rates and inflation.
Investors are growing increasingly concerned about the ballooning U.S. federal deficit and its potential impact on the bond market's ability to finance the shortfall at current interest rates, according to Yardeni Research.
The US is facing a potential financial crisis as the national debt reaches $33 trillion and the federal deficit is expected to double, posing a threat to President Biden's government and potential consequences for American citizens.
The US federal debt has reached $32.94 trillion, prompting concerns from JPMorgan Chase CEO Jamie Dimon about the impact on households, while Congress faces pressure to pass a new budget before potential government shutdown at the end of September.
The Federal Reserve has surpassed $100 billion in losses, and experts predict that the losses could potentially double before they start to decrease, as the central bank continues to pay out more in interest costs than it earns from bonds and financial sector services.
The US's $32 trillion debt may not be as dire as it seems, as experts point out misconceptions about the national deficit and its impact on the economy. However, future debt problems could arise due to current spending rates.
The Congressional Budget Office (CBO) is revising its projections for this year's US budget deficit, expecting it to be significantly higher than previous estimates, reaching $1.7 trillion in 2023, a 13% increase from four months ago.
The US national debt has reached a record high of $33 trillion, prompting the need for leaders to decide whether to raise the debt ceiling, as inflation continues to rise and there is a looming government shutdown.
