US Public Debt Surpasses $40 Trillion Amid Global Economic Divergence

The United States public debt has surpassed $40 trillion for the first time, leading Scott Bessent, the Treasury Secretary, to increase a buyback program for longer-dated securities to reduce borrowing costs. This development coincides with a global surge in sovereign borrowing rates, with 30-year US Treasury yields reaching their highest levels since 2007.

Other major economies are experiencing diverging trends. In the United Kingdom, inflation rose to 2.9% in July, fueled by a 13% increase in the household energy price cap, while job vacancies fell to a five-year low. In Asia, Japan reported an unexpected slowdown in economic growth through June, prompting Prime Minister Sanae Takaichi to seek increased spending in next year's initial budget request. Simultaneously, the government of China is deploying targeted fiscal programs to stimulate consumer and business borrowing as growth misses government targets.

In South America, President Javier Milei has successfully eliminated Argentina's budget deficit and reduced both inflation and poverty, although employment in the formal sector continues to decline.