Overview
- David Kelly of JPMorgan Asset Management says the U.S. fiscal position is deteriorating gradually, not in a sudden crisis.
- He cites national debt of about $37.8 trillion and roughly $1.2 trillion in annual interest costs as key pressure points.
- JPMorgan estimates federal debt held by the public at 99.9% of GDP and projects a rise to 102.2% within a year under assumptions of 4.5% nominal growth and no recession.
- Kelly warns tariff receipts remain uncertain due to potential Supreme Court action that could force refunds, even as the White House reported $31 billion collected in August.
- Policy choices loom large, with the CBO estimating the One Big Beautiful Bill adds about $3.4 trillion to debt and tariffs potentially cutting deficits by $4 trillion by 2035, while Kelly advises allocating to alternative assets and international stocks as 30‑year yields hover near 4.6%.