[Ray Dalio. (Reuters=Yonhap News Agency photo)]
“Top figures on Wall Street are sounding the alarm about the rapidly growing U.S. government debt. Ray Dalio, founder of the world’s largest hedge fund Bridgewater Associates, and Jamie Dimon, CEO of JPMorgan Chase, known as the ‘Emperor of Wall Street,’ have expressed concerns about the negative impact of the increasing U.S. debt.
Dalio, in an interview with the UK daily Financial Times on the 16th local time, said he is worried about the decreasing enthusiasm of investors for U.S. Treasury bonds.
He explained, “I’m worried about whether overseas bond investors (other than the U.S.) can digest the supply due to weakening demand for bonds stemming from concerns about the situation of U.S. debt growth (and possible sanctions against countries other than Russia).” If investor concerns grow, they may demand higher returns for investing in Treasury bonds, leading to higher borrowing costs for the U.S. economy.
CEO Dimon also argued in an interview with UK’s Sky News on the 15th that the U.S. government should focus on reducing the deficit before financial markets take drastic measures.
Dimon warned, “It is better to focus on this problem quickly,” and “At some point, the problem will arise and appear in the market, and it will need to be addressed in a much more uncomfortable way than dealing with it early.” Extensive budget deficits prompt the U.S. government to issue more Treasury bonds to reduce the deficit, resulting in an expansion of the U.S. debt.
The statements of these key figures in the U.S. financial sector reflect widespread concerns about the massive U.S. government debt, which exceeds $34.6 trillion (approximately 4.7 quadrillion won), larger than the size of the U.S. economy, according to the U.S. Treasury. The federal government spent $855 billion more than tax revenue in the 2024 fiscal year that began in October last year.”
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