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US debt concerns resurface as deficit nears 6% of GDP
The article says the premium on long-term US Treasuries has largely evaporated, weakening their appeal as a relative safe asset.
A Guardian Business analysis questions whether the Trump administration’s Treasury is starting to panic about the country’s debt burden as global long-term interest rates rise and debt levels climb past $40tn.
The piece notes that the federal deficit is running at roughly 6% of GDP, and it frames the key market concern as whether the US can sustainably fund borrowing without relying on optimistic projections for AI-driven revenue growth.
It argues that Treasury efforts to change the maturity structure of government debt amount to addressing the symptom rather than the underlying deficit problem, pointing to budget consolidation as the “textbook” solution.
The article adds that it sees the relative safety premium of long-term US Treasuries as having largely evaporated versus other advanced economies, warning that any future budget crisis could quickly erode the dollar’s global market share.