Corporate Legal Counsel (cand.merc.jur.) • External Lecturer at CBS • Section Head at Banedanmark
My analysis: $40 trillion in national debt and National Emergency as crisis management
In my analyses of the US debt market, I view the exploding national debt of over $40 trillion USD as the decisive pivot point for monetary policy in the coming years. When interest expenses exceed $1.4 trillion USD annually, the state is forced into financial repression to keep bond yields down via short T-bills. This shifts the adjustment pressure directly to the dollar and drives capital toward real assets.
Leading up to the 2026 midterm elections, I assess that presidential emergency powers (National Emergencies Act / IEEPA) constitute a rational model for the executive branch to bypass parliamentary gridlock, control capital flows, and enforce strategic control.
My weekly analyses of interest rates, markets, and liquidity. Published every Friday evening.
This week, the 10-year US Treasury yield is hovering around 4.50%, while the Fed Funds rate sits at 3.75%. The US national debt has crossed $40.3 trillion this week.
When a state refuses to pay the market rate for its $40T debt, the bill is passed to the currency. The dollar is quietly weakening against gold and hard assets. The Debasement Trade is, in my opinion, the most rational response to the central banks' current dilemma.
Sources: Deutsche Bank.
This week, the 10-year US Treasury yield is hovering around 4.50%, while the Fed Funds rate sits at 3.75%. The US national debt has crossed $40.1 trillion this week.
We are approaching the US midterm elections, and the debt issue is acute. As a legal professional and economist, I note the discussions about using presidential emergency powers (IEEPA) to manage the economy while bypassing Congress. An extreme, but possible move.
Sources: EveryCRSReport.