Doug Elmendorf on the (un)Sustainability of Rising Federal Debt

Market participants are growing increasingly worried that ballooning debt levels and high interest rates could precipitate a fiscal crisis in the US. Total federal debt recently surpassed $40 trillion and the government’s annual debt service payments exceed $1 trillion. Last month’s selloff in French sovereign debt shows how a sudden shift in perceived credibility can lead to a negative feedback loop of higher rates and wider deficits. In this episode, we talk with Doug Elmendorf, former Director of the Congressional Budget Office, about assessing the sustainability of federal debt, how a fiscal crisis could unfold, and what bond yields are saying about expectations for a balanced budget.

Simply Put: Expert perspectives on the trends influencing fixed income, banking, and the macro landscape, hosted by FHN Financial’s Macro Strategist, Will Compernolle. Tune in to better understand what’s moving the markets and what to keep an eye on in the weeks and months ahead. Listen and subscribe wherever you get your podcasts.