JPMorgan's Kelly Sees US Debt Hitting 115%-130% of GDP by 2036, With Crisis Risk Rising
Updated
Updated · Fortune · May 28
JPMorgan's Kelly Sees US Debt Hitting 115%-130% of GDP by 2036, With Crisis Risk Rising
2 articles · Updated · Fortune · May 28
Five scenarios in David Kelly’s new analysis all leave U.S. debt higher by 2036, with the best case at 115% of GDP, a baseline near 130%, and a fiscal crisis he says is more likely than serious reform.
Federal debt held by the public is on track to reach $32.2 trillion, or 100.4% of GDP, this fiscal year, with a 2026 deficit near $1.89 trillion and interest costs alone above $1 trillion.
Kelly argues the baseline worsens if tax cuts are extended, tariff revenue falls short and the next decade includes a recession and inflation episode; Dallas Fed research he cites implies 10-year Treasury yields could rise to about 5.46%.
His crisis path centers on a 2027 debt-ceiling showdown or a loss of Fed independence, either of which could hit Treasuries, weaken the dollar and trigger a broader global selloff.
The report says spending cuts or tax hikes remain politically difficult, reinforcing Kelly’s broader view that the U.S. is still "going broke slowly" rather than fixing its fiscal trajectory.
The world runs on the US dollar. What happens to global markets if America's debt spiral finally breaks?
As debt interest payments skyrocket, what essential public investments in America's future are being sacrificed?
Will artificial intelligence rescue America's economy, or will it deepen the fiscal crisis by concentrating wealth?