US Debt Looks 'Unsustainable,' And Corporate Defaults Are Rising: IMF

The US's $33 trillion debt pile is reflecting "Unsustainable" fiscal policy, the IMF said.

"Under unchanged policies, debt dynamics in the US are very unfavorable," the IMF warned.

The US debt situation is looking increasingly precarious, and corporate defaults are up as interest rates stay high, according to the International Monetary Fund.

"Under unchanged policies, debt dynamics in the US are very unfavorable," he said, later adding that the "The perpetuation of current policies entails an unsustainable fiscal path."

Higher rates are also bound to spark some distress for borrowers, with over $2 trillion of corporate debt set to mature in the US alone in 2024.

"Making debt more expensive is an intended consequence of tightening monetary policy to contain inflation. The risk is that borrowers might already be in precarious positions financially, and the higher interest rates could amplify these fragilities, leading to a surge of defaults," the IMF warned in a blog on Tuesday.

Corporate debt defaults have already been rising globally, notching their highest monthly increase in August, according to S&P Global data.

 https://markets.businessinsider.com/news/bonds/us-debt-crisis-government-spending-unsustainable-defaults-interest-rates-imf-2023-10