The United States has entered a new phase of fiscal alarm. As of May 25, the U.S. national debt has reached a record $36.5 trillion, and what’s more concerning is that it’s growing by $1 trillion every 100 days. This rapid increase has captured the attention of Wall Street, global investors, and financial watchdogs alike.
Wall Street on Edge as Bond Yields Climb
Out of the current total, $28.9 trillion is publicly held debt, with the remainder in intragovernmental accounts. After Moody’s downgraded the U.S. credit outlook, investor confidence began to fade, pushing borrowing costs higher and sparking renewed concerns over long-term sustainability.
Confidence has been further shaken by President Donald Trump’s new tax and spending plan, which, according to the Committee for a Responsible Federal Budget, could add another $3.3 trillion in debt by 2034. JPMorgan CEO Jamie Dimon has warned of a potential “fracture” in the bond market due to irresponsible spending and poor fiscal governance.
🌍 G7 Nations Under Pressure: Japan Cuts Bond Holdings, UK Surpasses 100% Debt-to-GDP
The debt crisis isn’t confined to the U.S. — G7 economies are also showing signs of strain:
🔹 Japan’s public debt exceeds 200% of its GDP. In May, a 20-year bond auction collapsed, and for the first time in 16 years, the Bank of Japan reduced its government bond holdings.
🔹 The UK has now crossed the 100% debt-to-GDP threshold, and 30-year bond yields have surged above 5%. Finance Minister Rachel Reeves is preparing a new multi-year spending plan, raising fears of expanding public expenditures despite promises to avoid tax hikes.
🔹 France has seen modest market relief, with its bond spread over Germany narrowing. But a new four-year debt reduction plan expected in July is already facing resistance in Parliament.
🔹 Italy, long the fiscal outlier of the G7, has surprised markets with improving figures. Its budget deficit fell from 7.2% to 3.4% of GDP, and projections suggest it could decline to 2.9% by 2026. The yield gap between Italian and German 10-year bonds is now at its lowest level since 2021.
What’s Next?
As global debt loads soar, debt sustainability and borrowing costs are becoming key factors shaping financial markets. If governments fail to balance spending and investor confidence, further instability may lie ahead.
Summary:
🔹 U.S. debt hits a record $36.5 trillion
🔹 G7 countries face rising fiscal pressure and investor anxiety
🔹 Japan, the UK, and France struggle with debt sustainability
🔹 Italy shows surprising improvement through fiscal discipline
#globaleconomy , #TRUMP , #usa , #economy , #worldnews
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