Catenaa, Friday, October 24, 2025-JPMorgan Asset Management’s chief global strategist, David Kelly, says the United States is “going broke slowly” as national debt climbs past $37.8 trillion, with interest payments hitting $1.2 trillion.
While the pace is gradual, long-term fiscal challenges could threaten economic stability.
Kelly noted that investors often ask when federal debt might “blow up,” but he emphasized that borrowing remains manageable for now, with 30-year US Treasury yields at 4.6%.
He pointed out that the country’s debt-to-GDP ratio, currently near 99.9%, is projected to rise above 102% within a year if deficits exceed economic growth.
Analysts warn this trajectory could accelerate depending on political decisions, recession risks, and challenges to tariff revenues implemented under former President Trump’s policies.
Recent tariff income, including $31 billion in August, has slightly offset deficits, but Kelly stressed these gains are not guaranteed.
Legal challenges to tariffs or unexpected domestic and international spending could rapidly increase deficits.
The Congressional Budget Office projects fiscal 2025 deficits at 6% of GDP, a slight improvement from last year, but still concerning given the sheer scale of public debt.
Investors are advised to diversify portfolios, with Kelly recommending alternative assets and international stocks to mitigate potential risks from a faster-than-expected deterioration of US finances.
JPMorgan executives, including CEO Jamie Dimon, and Federal Reserve Chair Jerome Powell, have also expressed concerns over long-term debt sustainability and the implications for interest rates and the US dollar.
