The growing US debt: a threat to the confidence of international markets

The crisis of American assets, which depend on funds from foreign investors, may manifest itself as early as next year. Analysts believe that 2026 will be a turning point when international investors will decide whether to continue financing the growing U.S. debt.  

Over the past decade, the US external debt has increased, and now the country's economy is heavily dependent on foreign capital. Any reluctance by investors to buy Treasury bonds or support the dollar will inevitably affect financial stability.  

The yield on 10-year bonds decreased by 15 bps, while the dollar index fell by 8%. The recent bill passed by the Senate is unlikely to solve the deficit problem, but rather exacerbate it. The risks will lead to an increase in risk premiums for dollars and bonds, which may deter investors even with a decrease in asset values.  

Against the background of weak domestic savings, the confidence of foreign investors is becoming a key factor. Analysts note that even the Fed's rate cuts may not attract foreign participants if risk premiums continue to rise.