Waller says growing out of $40 trillion debt requires near-zero deficits

  • Christopher Waller linked higher Treasury yields to fiscal concerns, reduced demand for Treasuries and competition for capital from AI infrastructure.
  • The United States could grow out of its $40 trillion debt only if structural deficits approach zero, versus about 6% of GDP this fiscal year.
  • The benchmark Treasury yield fell to 4.74% Thursday from 4.818% Wednesday, while nearly all S&P 500 sectors rose after Waller's remarks.

Federal Reserve Governor Christopher Waller said competition for capital from artificial intelligence infrastructure investment and concerns about the U.S. fiscal position are pushing Treasury yields higher as the safety premium supporting Treasuries has largely disappeared. He said the United States could grow out of its $40 trillion debt only if structural deficits moved close to zero, compared with about 6% of GDP this fiscal year. Waller favored keeping interest rates steady at the Federal Reserve's next policy meeting if incoming data confirm easing inflation pressures. His dovish remarks helped lower Treasury yields and were followed by gains across nearly all S&P 500 sectors.

The information on this website is generated using AI and we cannot guarantee its accuracy. Please use it as reference information only.