05/06/25 Afternoon CommStock Report – Out of Time

Part 6 of Many   The US faces an immediate major fiscal challenge. The US Treasury has to refinance about $7.6 trillion of existing debt this next year while borrowing another $3 trillion of new debt. That is a lot. The old debt was held at a lower interest rate so the Treasury will pay more to get bond buyers to recommit. It would have been better to have done this sooner when rates were lower. The bond market has wavered and shown some cracks in the solid façade as collateral damage from the trade war. It has been the unquestionable confidence in the dollar and US economy that has allowed the US to finance 7% of its annual fiscal budget. Jerome Powell says that the trajectory of our rising debt is unsustainable. Ray Dalio says that we have to get our borrowing down to 3% of GDP. The Fed is apolitical and so is Dalio. This is just economic reality. The US has been adding debt all these years knowing that at some point that it could be a problem and there are signs that that day is here.   US Treasury Bonds have held the confidence of world…