The U.S. debt burden has been growing at a faster pace in recent months, increasing by about $1 trillion nearly every 100 days.
The nation's debt crossed the $34 trillion mark for good on Jan. 4, after briefly crossing the mark on Dec. 29, according to the U.S. Treasury Department. It reached $33 trillion on September 15, 2023 and $32 trillion on June 15, 2023, achieving this accelerated pace. Before that, the increase of $1 trillion from $31 trillion took about eight months.
The U.S. debt, which is the amount of money the federal government borrows to cover operating expenses, now stands at nearly $34.4 trillion as of Wednesday. Bank of America investment strategist Michael Hartnett believes the 100-day model will remain unchanged as it moves from $34 trillion to $35 trillion.
“It’s no surprise that ‘debt depreciation’ deals are near all-time highs, i.e. gold $2,077/oz, bitcoin $67,734,” he wrote in a note on Thursday.
Spot gold is currently hovering around $2,084 an ounce, while Bitcoin was recently hovering around $61,443. The cryptocurrency closed out its best month since 2020 in February, briefly trading above $64,000 on Wednesday before pulling back. Inflows into crypto funds are on track for an “explosive year,” with annual inflows of $44.7 billion this year, Hartnett noted.
Moody's Investors Service downgraded its outlook on the US government's ratings from stable to negative in November due to growing risks to the country's fiscal sustainability.
“In an environment of higher interest rates without effective fiscal policy measures to reduce government spending or increase revenue,” the agency said. "Moody's expects the U.S. fiscal deficit to remain very large, significantly weakening the availability of debt financing."