Congressional Budget Office warns: Soaring U.S. debt means potential for a Liz Truss-style market shock

PANews March 26 news, according to CoinDesk, the U.S. Congressional Budget Office (CBO) warned that the rising debt in the United States may lead to market shocks similar to those during the period of former British Prime Minister Liz Truss. CBO pointed out that if the US government continues to ignore the debt problem, it may face risks similar to those in the UK. Bitcoin and gold prices may already be pricing in a crisis scenario, with both assets hitting new highs recently despite higher global interest rates and bond yields. Analysts say debt concerns could help Bitcoin and gold rise to new all-time highs amid rising global interest rates.

U.S. federal debt totaled $26.2 trillion at the end of 2023, or about 97% of gross domestic product (GDP), according to the Congressional Budget Office. The nonpartisan independent agency projects the debt-to-GDP ratio will exceed the World War II high of 116% by 2029 and reach 166% by 2054. In 2022, former British Prime Minister Liz Truss announced radical economic measures, including significant tax cuts and billions of pounds of spending, despite the need for fiscal prudence as the government's debt surged. The result was market chaos, the pound falling to record lows against the dollar, and the collapse of Truss's government, the shortest in the country's history.