- The U.S. national debt has crossed the $40 trillion mark due to pandemic spending, tariffs, and conflict expenses under President Donald Trump and the Biden administration.
- Policy experts warning about the debt level argue that heavy interest payments are driving up the cost of living and risking a future economic recession.
- Treasury Secretary Scott Bessent downplayed fears over the $40 trillion milestone, expressing optimism that economic growth will resolve the national debt.
- Consumers face immediate impacts through elevated interest rates on mortgages, auto loans, and business loans, which are closely linked to U.S. bond yields. The first place that the average American is likely to feel the impacts of growing national debt is in rising interest rates on their mortgages, car loans and business loans.
- While high national debt threatens lower wage growth, higher taxes, and reduced public services, investors may benefit from increased yields on Treasury securities and CDs.
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