Worsening US debt outlook seen more in gold and bitcoin than in bonds
The U.S. budget deficit widened to $1.7 trillion in fiscal year 2023 and is on track to reach $2.6 trillion by 2034, according to the Congressional Budget Office. U.S. government debt held by the public, meanwhile, is on pace to reach a record 106% of gross domestic product (GDP) in 2028, up from 97% in fiscal year 2023. It has soared to $27 trillion from $17 trillion in early 2020 and $5 trillion in 2007.
The unchecked growth of U.S. government debt is gaining more attention as interest rate payments also take a larger bite of the government's budget — in some months exceeding spending on national defense.
This worsening trajectory has boosted demand for bitcoin and gold, which are often used as a hedge against inflation and the depreciating purchasing power of the U.S. currency.
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View Details» «Concerns about the U.S. debt cycle, devaluation of money — and fiat money in particular — does drive the story and the narrative,» said Brad Bechtel, global head of FX at Jefferies.
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