Home / Business and Economy / JPMorgan Warns of Inflation, Fed Erosion, and Market Turmoil in U.S. Debt Crisis
JPMorgan Warns of Inflation, Fed Erosion, and Market Turmoil in U.S. Debt Crisis
18 Nov
Summary
- U.S. national debt reaches $38.15 trillion, debt-to-GDP ratio around 120%
- JPMorgan sees "financial repression" as solution, tolerating higher inflation and eroding Fed independence
- Crypto markets down $842.60 million in past 24 hours amid broader risk-off moves
As of November 18th, 2025, JPMorgan Private Bank's outlook paints a concerning picture for the United States' economic future. The country's national debt has swelled to a staggering $38.15 trillion, with the debt-to-GDP ratio hovering around 120%. This means the U.S. owes significantly more than it produces annually, raising questions about the government's ability to service and roll over that debt without alarming investors.
According to JPMorgan, the politically clean options to address this debt crisis are limited. Cutting spending on Social Security and Medicare is "politically unpalatable," while raising taxes further is constrained by the U.S. already having relatively low tax revenue as a share of GDP.
Instead, the bank sketches a more subtle path of "financial repression." This involves policymakers tolerating higher nominal growth and inflation while keeping real interest rates low. If inflation runs above nominal yields for long enough, the real value of outstanding debt would quietly shrink over time. However, this would clash with the Federal Reserve's mandate of stable prices and maximum employment, unless the central bank's independence is eroded, and it is forced to prioritize debt sustainability over strict price stability.
The backdrop for JPMorgan's warning is already jittery, with global crypto markets sitting around the $3 trillion mark but facing broad risk-off moves. In the past 24 hours, around 159,562 traders have been liquidated, with total liquidations near $842.60 million.
