Live Recap 2: The U.S. Debt Spiral — How Washington’s Deficits Could Reach Your Portfolio
1. Live Review Introduction
Tiger Brokers’ What The Expert Says session featured Selina Han, Founder of Han Insights, Chief Product Officer of GSA Technologies and former Cboe economist, alongside James Early, CEO of Curia Financial and longtime investment research professional. Hosted by Esther Xiao, the discussion explored the Fall 2026 investment outlook through one central chain: Debt → Rates → Markets → Trades.
The second part of the Fall 2026 outlook moved from the size of U.S. debt to something more relevant for investors: how does fiscal stress actually reach financial markets?
A large debt number does not automatically tell investors whether to buy or sell stocks. The transmission mechanism matters.
Disclaimer: The session has not been reviewed by the Monetary Authority of Singapore. The views expressed are those of the speakers and do not represent Tiger Brokers or its affiliates. This content is for educational purposes only and does not constitute investment advice.
Want to see more of the livestream recap? Check it out here>>
Live Recap 1: Why Can America Carry So Much Debt? Inside the Dollar Advantage
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2. From Deficit to Higher Interest Costs
The presentation describes a potential feedback loop beginning with fiscal deficits. Larger deficits require greater Treasury issuance. If investors demand higher yields to absorb the additional bonds, government refinancing becomes more expensive. Higher interest expense then widens the deficit further, potentially creating another round of borrowing.
The chain can be summarised as:
Large deficits → more Treasury issuance → higher refinancing costs → higher interest expense → larger deficits
Importantly, the session did not present this outcome as inevitable. Strong Treasury demand, economic growth, inflation and Federal Reserve policy can all interrupt or soften the cycle.
3. Why Interest Expense Matters More Now
The concern has become more relevant because the government is refinancing debt at materially higher rates than during the ultra-low-rate period.
As older low-cost debt matures, replacing it with higher-yielding securities raises the government’s financing burden even before considering new spending.
This is where the fiscal story becomes a market story. Treasury yields are the foundation for pricing across financial assets. They influence mortgages, corporate bonds, bank funding and the discount rate investors apply to future corporate earnings.
A rise in government borrowing costs therefore does not remain confined to Washington.
4. From Debt Stress to Currency Confidence
The next stage of the framework is confidence.
Persistent deficits and rising interest expenses can gradually change how investors view fiscal sustainability. That does not necessarily mean a sudden collapse in the dollar. Reserve currencies tend to lose influence gradually through shifting capital flows, reserve allocations and trade patterns.
The key risk is therefore not necessarily a dramatic default event. Markets can reprice long before that through a higher term premium, weaker currency confidence or greater demand for alternative stores of value.
5. If Not the Dollar, Then What?
The presentation compares several potential alternatives.
The euro benefits from economic scale and developed markets, but Europe lacks a single unified Treasury market comparable with the U.S. China has enormous economic and trade scale, yet capital controls constrain the renminbi’s reserve role. The yen, pound and Swiss franc are trusted, but their economies are significantly smaller.
$Gold.com(GOLD)$ is different. It does not replace the dollar as a global payment and banking system, but it can serve as a reserve-diversification asset.
6. Why Gold and Bitcoin Enter the Conversation
The session then compared the 30-year Treasury yield with gold and Bitcoin between September 2024 and September 2026.
Despite higher long-term rates, $Gold.com(GOLD)$ remained substantially above its 2024 starting level. $Bitcoin(BTC.USD.CC)$ showed considerably larger swings.
The deck estimates a monthly correlation of roughly -0.08 between changes in the 30-year yield and gold returns, compared with around 0.58 for Bitcoin over the period shown. The presentation explicitly treats these relationships as descriptive rather than causal.
The broader insight is that neither gold nor Bitcoin responds only to interest rates. Fiscal credibility, liquidity, monetary policy, inflation expectations and investor confidence all matter.
7. The Fiscal Arithmetic Has Only a Few Solutions
Ultimately, debt sustainability comes down to growth.
If nominal debt continues expanding faster than the economy, policymakers need some combination of stronger GDP growth, spending restraint, higher revenues or inflation reducing the real value of outstanding debt.
Faster real economic growth is clearly the best outcome, but it cannot simply be legislated into existence. Inflation can make existing nominal debt easier to carry in real terms, but it also damages purchasing power and can push bond yields higher.
That tension explains the debate over whether policymakers should deliberately try to suppress long-term Treasury yields.
Closing Takeaway
Investors do not need to predict a U.S. sovereign default for the debt problem to matter.
Fiscal pressure already reaches portfolios through a much more ordinary chain:
Debt → Treasury supply → yields → financing costs → equity valuations → currencies → gold and alternative assets.
The debt debate is therefore not only a political issue. It is increasingly part of asset pricing.
8. Risk Reminder
$Gold.com(GOLD)$, cryptocurrencies, bonds and equities carry different risk profiles. Correlations can change materially across market regimes.
9. Post-Event Resources
Viewers can follow Selina Han on Tothemoon ( @Selina_Han_Insights) or visit the Han Insights website (https://haninsights.com/). The full livestream replay is available on the Tiger Trade app.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
