America's debt problem is storing up trouble for the rest of the world

The high level of US government debt poses risks to global financial stability, warns the International Monetary Fund (IMF). The IMF attributes this to increased government spending, growing public debt, and elevated interest rates in the US, resulting in high and volatile yields on Treasuries. The analysis reveals that surges in US government bond yields correspond to similar increases in other economies, leading to exchange rate turbulence. Loose US fiscal policy puts upward pressure on global interest rates and the dollar, exacerbating existing fragilities and risks. The IMF highlights concerns about the consequences of ballooning US government debt.