The US national debt could rise by $20 trillion over the next decade, Bank of America (BoA) said, citing data from the Congressional Budget Office.
According to the forecast, the outstanding public debt stands at approximately $33.6 trillion, but at the rate it is growing, and due to the "fiscal surplus in the 2020s," it is likely to increase by $5.2 billion per day for the next 10 years, which would put it at about $54 trillion by 2033.
According to the BOS, one of the factors that led to a further increase in debt is the sharp increase in the federal deficit, which increased by $320 billion to $1.7 trillion this year, forcing the Treasury Department to sell new bonds worth trillions of dollars.
The increase in annual interest payments caused by rising bond yields is also weighing on the federal budget and widening deficits, the bank noted.
"US public debt is more than the combined GDP of China, Japan, Germany and India", Bank of America investment strategist Michael Hartnett noted in the forecast.
He warned, however, that Washington is unlikely to stop borrowing even if the federal deficit is reined in, because borrowing is seen as a tool to spur economic growth and help stimulate the flow of money.
"Central banks may simply bail out governments in the coming years through quantitative easing and the introduction of yield curve controls," Hartnett added.
The U.S. exceeded its debt ceiling, which was legally set at $31.4 trillion, in January 2023. After months of warnings of an imminent and economically catastrophic U.S. Treasury default, President Joe Biden signed a bipartisan debt bill in June which allowed the limit to be lifted by January 2025.
This allowed the government to continue to borrow without restrictions during the next year. The debt rose to $32 trillion less than two weeks after the bill passed and has been piling up ever since.
