Marketplace · Thursday, August 13, 2026
According to Greg Ipp, the U.S. could enter a debt spiral once the bond market loses confidence in its ability to manage its debt. While the U.S. benefits from issuing the world's most desirable debt, continued large deficits could lead to gradually higher interest rates. He cautioned that a disaster scenario, though unlikely, is possible if debt markets become unstable during periods of global risk.
“And I gave a much longer answer than this, but the short answer was, as soon as the bond market gives up on us, right?”
“That's right. Now, not to bury the lead, we just don't know when that will happen. Uh, countries have run bigger debts relative to their economy than we have right now. And the US is lucky in that we issue the world's most desirable debt.”
“But year by year, it will be penalized with slightly higher, slightly higher interest rates, which then will ripple through everybody else.”