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Paying America’s Bills

What investors should know about how the U.S. government manages its finances.

Brian Rehling, CFA, Head of Global Fixed Income Strategy

Luis Alvarado, Global Fixed Income Strategist

Tony Miano, CFA, Investment Strategy Analyst

September 2024

Key takeaways

  • At over $34 trillion, the federal debt is staggering but currently manageable. What’s troubling is the prospect for its continued growth over the long term.
  • We believe the Treasury has done a good job of managing the debt expense, and investors have shown no reservations about buying Treasury securities. Lower rates over the past decade helped keep funding costs low, but higher interest rates are already expected to cause interest expense to grab a bigger bite of the budget.
  • Although it’s unlikely that investors will feel the most damaging effects of America’s fiscal challenges soon, some repercussions have already started to trickle down to financial markets. Wells Fargo Investment Institute (WFII) is already factoring near-term impacts into our investment guidance.
Download full report (PDF)

Wells Fargo Investment Institute, Inc., is a registered investment adviser and wholly owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.