U.S. Debt Market Skyrockets, Benefiting Bond Traders

As the U.S. debt continues to rise to the highest levels ever in recorded history, the debt market prospers with the full intention of profiting off of the Fed.

In total, the United States has amassed a total debt of an estimated $35 trillion, which is expected to continue rising at even higher rates as time goes on. Sure, COVID spending did cause a short-term rise in debt, however higher interest rates implemented by the Fed to reduce inflation has caused its interest costs to skyrocket. Now, the nation pays more for interest than defense spending, which the country is known for putting at the forefront. This massive interest problem has caused U.S. debt to continue to rise at historic levels with no end in sight.

The U.S. government has done very little to reduce the national debt, in fact they have promoting growing the debt. Every year, the U.S. Congress passes massive spending bills, and even expensive aid packages to Ukraine and Israel, which are sinking America down a never-ending cycle of taking out loans. Now, the debt-per-capita has reached over $100,000, meaning that many Americans and the government are left with one option: taking out loans.

And who profits off of these loans? Bond traders. Traders have grown their portfolios massively over the past four years, riding the wave of growing interest rates to generate even more interest revenue. Mortgages have become more difficult to pay or even obtain and low-interest loans have become virtually nonexistent for millions of Americans.

Traders have excelled in reacting to events as they arrive. The 2024 election and its never-ending news coverage has caused markets to shift so violently, and these traders are selling bonds to gamble over if the results of the presidential election could make them ever better returns. States and local governments have issued $21 billion in debt sales over the next 30 days, highlighting this truly dangerous trend in the economy.