Why Crypto Matters: U.S. National Debt Soars Past $26 Trillion
Quick Take
- U.S. national debt soars past $26 trillion amid the coronavirus outbreak.
- The U.S. Federal Reserve balance sheet has surpassed $7 trillion as COVID-19 economic relief continues.
The U.S. national debt has soared past $26 trillion for the first time as economic relief continues amid the coronavirus outbreak. The U.S. national debt is up over 12% since January, an increase of nearly $3 trillion.
More importantly, The Committee for a Responsible Federal Budget, a non-partisan organization, estimates that federal debt will grow by $4 trillion in 2020.
Furthermore, U.S. national debt has been climbing at a rapid pace, growing by over $1 trillion since May 3. The soaring U.S. national debt may raise concerns over the U.S.’s ability to sustain the growing debt, which may have significant implications for the U.S. Dollar, the world’s reserve currency.
Federal Reserve Balance Sheet Soars
The U.S. Federal Reserve balance sheet has also been on the rise amid the coronavirus outbreak. The balance sheet has surpassed $7 trillion for the first time in the nation’s history after growing by nearly $3 trillion since January of this year.
Quantitative easing may be playing a substantial role in the recent balance sheet growth. Quantitative easing (QE) is a type of monetary policy by which central banks purchase assets from the market. Through QE, governments are essentially injecting money into the economy with hopes of economic stimulation. As reported earlier by The Crypto Associate, the Federal Reserve will continue asset purchases and keep interest rates near-zero.
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