Yahoo Finance anchor Julie Hyman joins Asking for a Trend with Josh Lipton to examine forecasts to the United States' debt-to-GDP (gross domestic product) ratio, according to data from Deutsche Bank, following Moody's downgrade to the US credit rating.
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The markets digesting Moody's shot across the bow, downgrading the US credit rating. Yahoo finances, Julie Hyman, join me now with a closer look in our chart of the day.
Thanks so much, Josh. Well, as we look at today's chart of the day, it effectively measures the debt to GDP ratio, both historically and projected in the future. It comes to us via Deutsche Bank and Jim Reed over there, who sends out a daily chart. This is really what is at issue here. The huge debt load that we have here in the United States and the cost to service that debt. Now Moody's is forecasting that by 2034 our debt to GDP will be 134%. That's from around 100% right now. The CBO, the Congressional Budget Office has plotted out to 2055 and put it at 156%, but if we do have the tax cut scenario that looks like is going to go through, it could be as much as 220% going out to that time. So here's what is issue here. Jim Reed over at Deutsche Bank wrote that this wasn't a surprise, but it's another small crack in the edific edifice here that really pushes debt and deficits much higher and could be problematic in the future, Josh.
All right. Thank you, Julie.