Could higher interest rates push US debt-to-GDP to 132% by 2035? Goldman Sachs warns
US debt could reach 132% of GDP by 2035 as higher interest rates raise borrowing costs, Goldman Sachs warns, adding pressure on the US budget and deficit.
Goldman Sachs has raised concerns that persistently high US interest rates could push the country's debt-to-GDP ratio to 132% by 2035. The investment bank warns that such a high ratio could put additional pressure on government finances, and may force the US to reduce its budget deficit sooner than expected. If interest rates stay elevated for longer periods, Goldman Sachs predicts that US debt-to-GDP could reach 132%, which is 10 percentage points higher than the bank's baseline forecast.
The bank's strategist, Pierfrancesco Mei, states that higher interest rates would increase the cost of servicing the US national debt, and put more strain on government finances.
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