New US Debt Projections Put Spotlight on the ‘Doom Loop’ Scenario
The latest projections for US borrowing show debt climbing to worrying levels.
This article is for subscribers only.
I’m Chris Anstey, a senior editor in Boston. Today we’re looking at implications from new US debt projections. Send us feedback and tips to ecodaily@bloomberg.net. And if you aren’t yet signed up to receive this newsletter, you can do so here.
One of the darkest scenarios for government borrowing features investors beginning to demand higher returns for the money they fork over to take on public debt. The government then has to borrow even more in order to pay for the higher interest costs on the bonds it’s just sold. That spurs investors to press for even higher yields. And so on. It’s known as the doom loop.