The rising US debt numbers have always been a serious topic of discussion among financial experts. While some of them are stricken with panic as debt metrics inch closer to $35 trillion, some experts are expressing a rather “tempered” outlook towards the said development. 

Supporting the latter, Morgan Stanley analysts are particularly favoring the tempered narrative, stating that the ballooning US debt metrics will not hamper the progress of the US dollar. 

Also Read: Currency: What To Expect From The US Dollar Today 

Morgan Stanley Experts Predict the Future of the US Dollar

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Experts at financial giant Morgan Stanley have backed the US dollar’s progress in a new statement. In a recent podcast session released by the institution, Morgan Stanley’s head of US public policy, Michael Zezas, shared a new compelling analysis. 

Zezas stated that the inflating US debt metrics will not hamper the dollar’s progression any time soon. The MS expert commented that the upcoming US elections may trigger a new fiscal plan for the US dollar, which may help ease pressure on the American currency. 

He later shared how US economists and the Federal Reserve are equipped with the right tools and mechanisms to fight inflationary pressure

“I understand the concern, but for the foreseeable future, there’s not much to it,” Zezas said. “Depending on the election outcome in the US, there’s some fiscal expansion on the table, but it’s not egregious in our view, and unless we think the Fed can’t fight inflation—and our economists think they can—then it’s hard to see a channel toward the dollar becoming an unstable currency.” Zezas reiterated. 

The institution’s stance towards the US dollar seemed pretty solid, as the expert added that the dollar can withstand any competitors attacking its prestige. 

“Bottom line, King Dollar doesn’t have any challengers,” Zezas opined. 

What Do The Statistics Portray?

While Morgan Stanley is forecasting a rather bright future for the US dollar, the statistical data at hand tells a different story. To begin with, the US debt metrics are inching towards $35 trillion, which may potentially detail the US economy’s direction and pace. 

Interesting note by Goldman Sachs today:

In the debt ceiling deal inflation adjusted spending actually RISES next year.

This means the debt deal will not only push total US debt above $35 trillion, but real spending actually RISES.

Here’s a breakdown of why.

(a thread)


— The Kobeissi Letter (@KobeissiLetter) May 30, 2023

Additionally, the government interest expense, or the interest paid on US debt, has already surpassed $1 trillion. This development is also signaling a death spiral that the US economy may be compelled to address sooner or later. 

Also Read: Gold vs.USD: World Dynamics Are Favoring Gold Over USD

Annualized interest expense on US Federal debt is nearing $1.1 TRILLION.

To put this in perspective, 2023 defense spending was $821 billion.

This means the US is on track to spend 34% MORE on interest expense than defense spending.

In 2023, the US government produced $4.4…

— The Kobeissi Letter (@KobeissiLetter) December 3, 2023

Moreover, the consumer sentiment index is also hitting a new low, signaling the US citizens’ distressing stance towards their decaying economy. 

“The consumer sentiment index fell from 77.2 in April to 67.4 in May, well below expectations. Americans’ expectations about the economy, personal finances, business, and buying conditions also plummeted to a six-month low. Meanwhile, consumers anticipate year-ahead inflation to rise to 3.5%, the highest reading since November 2023. Consumers are feeling the pain of inflation.

US consumer sentiment just dropped to its lowest level since November 2023.

The consumer sentiment index fell from 77.2 in April to 67.4 in May, well below expectations.

Americans’ expectations about the economy, personal finances, business, and buying conditions also plummeted…

— The Kobeissi Letter (@KobeissiLetter) May 13, 2024


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