TREE NEWS update: US Treasury debt is about to hit $40 trillion, with interest costs becoming the largest federal expense, pressuring bond markets. BofA’s Michael Hartnett recommends going long gold as the top hedge against dollar depreciation, bond collapse, and asset inflation, while warning of a bearish steepening yield curve and AI debt issuance crowding out Treasury buyers.
US Debt Nears $40T; BofA’s Hartnett Says Gold is Best Bet
Hartnett's call frames gold as the hedge of last resort when fiscal arithmetic turns self-reinforcing: debt service as the largest federal expense leaves less room for anything else, and a bearish steepening signals bondholders demanding more compensation. The AI debt issuance point matters most for crypto and RWA markets, since competing supply can crowd out Treasury demand and push yield-sensitive capital toward alternative stores of value. Whether that rotation actually shows up in flows, rather than just in strategist notes, is the open question.
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