JPMorgan Chase analysts are raising concerns as the U.S. national debt nears $35 trillion.
Recent Treasury data shows the total public debt stands at $34.99 trillion as of July 25, a significant increase from $32.59 trillion a year earlier.
In their latest investor memo, JPMorgan’s private banking division highlights the risks associated with the rising national debt and persistent deficits.
The bank forecasts no substantial improvement in the fiscal outlook and advises investors to adjust their strategies accordingly.
JPMorgan suggests diversifying portfolios beyond traditional U.S. dollar-denominated assets to include non-dollar assets and real assets like infrastructure, gold, and commodities. This shift could provide a hedge against inflation and currency devaluation.
The analysts caution that the escalating debt will constrain the U.S. government’s ability to respond to future economic challenges, making it crucial for investors to rethink the conventional 60/40 portfolio strategy in favor of more diversified approaches.
In a recent live address, U.S. President Donald Trump declared that a new base tariff of 10% would be applied universally to all countries.
Consumer spending in the U.S. showed weaker-than-expected growth in February, increasing only 0.1%, which was on the lower end of economists’ forecasts.
In February, the U.S. maintained its annual inflation rate at 2.5%, as reflected in the Personal Consumption Expenditures (PCE) Price Index, according to data released by the Bureau of Economic Analysis.
UBS has issued a stark warning to investors, flagging stagflation as a looming economic threat.