Wild swings in gold and silver prices reflect mounting stress in the US financial system, as soaring national debt and policy choices threaten economic stability and exacerbate market volatility.
Wild swings in the prices of gold and silver have become a leading indicator of mounting stress in the US fiscal and financial system, and policymakers are confronting a debt trajectory that independent forecasters say is unsustainable.
Precious metals markets moved into uncharted territory last year as investors poured into perceived safe havens. Silver surged dramatically before retreating, and gold briefly traded at several thousand dollars an ounce before a recent pullback. Market participants and analysts say those extremes echo behaviour last seen in the 1970s, when investors sought refuge from persistent inflation and policy uncertainty.
Underlying the market turbulence is a government balance sheet that has ballooned in size. Treasury data and budget analysts report the national debt crossed record thresholds during 2025, reaching roughly $37 trillion by August, and other compilations place current public debt near $38 trillion. According to the Congressional Budget Office, public debt is on a path to climb further, with projections this decade showing deficits close to $2 trillion annually and debt rising to well over 100 percent of gross domestic product by the early 2030s. The CBO’s long-range outlook warns the fiscal course is “not sustainable,” driven largely by rising mandatory spending for Social Security and Medicare and by escalating interest costs. Industry analysts say the cost of servicing the debt already rivals major items in the federal budget and is set to grow sharply without policy changes.
Policy choices are compounding the outlook. According to reporting by The Associated Press, recent legislation and executive actions , including a substantial tax and spending package described by budget offices as widening deficits , have materially worsened the 10-year outlook. The AP notes that while higher tariffs have produced significant receipts, official estimates find those levies also lift inflation through the remainder of the decade, delaying a return to the Federal Reserve’s 2 percent target until around 2030. Axios summarised the CBO view that last year’s major tax law will add trillions to deficits over the next ten years and that debt-service costs could approach or exceed 4 percent of GDP by the mid-2030s, imposing a growing drag on the economy.
Those fiscal pressures are evident in markets for government bonds. Yields on benchmark Treasury notes have risen sharply from pandemic-era lows as investors demand higher compensation for perceived sovereign risk. Other advanced economies have also seen rising borrowing costs, and episodes of stress in foreign bond markets prompted coordinated steps to calm conditions. Economists caution that, as foreign official demand for Treasuries moderates, the United States may face a structurally higher cost of borrowing.
The political economy complicates remedial options. Many commentators and fiscal watchdogs called for bipartisan action to stabilise the debt profile ahead of the 2026 elections; yet legislative choices to date have tended to expand rather than reduce fiscal commitments. The AP and budget analysts flag that projected increases in entitlement spending and interest outlays leave narrower policy space for deficit reduction without difficult choices on taxes or benefits.
Monetary policy and institutional credibility have also entered the debate. The recent nomination of Kevin Warsh as Federal Reserve chair drew approval in some markets for his reputed fiscal hawkishness, yet historians and economists point to past episodes when central-bank independence was tested under political pressure. The lead piece cited a conversation from the Nixon era in which Milton Friedman told the president “I don’t blame Arthur, Mr President, I blame you.” That exchange is invoked by some observers as a cautionary tale about the limits of what central banks can accomplish when fiscal policy runs counter to monetary stability.
Beyond the immediate budget numbers, analysts warn of broader consequences. Brookings and nonpartisan foundations emphasise that rapidly rising federal borrowing can push up interest rates across the economy, crowd out private investment, depress wages and elevate consumer prices. The Washington Post’s analysis of CBO projections shows debt could rise to levels not seen since World War II unless lawmakers change course, and that demographic and policy trends will keep mandatory spending on an upward trajectory.
Policymakers face a narrow set of options: enact credible, bipartisan measures to rein in structural deficits through a mix of spending restraint and revenue increases, allow higher inflation and debt to erode real obligations, or accept an extended period of higher interest rates and constrained growth. Budget experts cited by AP and other outlets urged immediate steps to stabilise debt dynamics, warning that delaying action while the economy remains relatively calm would make future adjustment more painful.
For markets and ordinary households alike, the immediate signal is clear. Financial assets are pricing in heightened uncertainty about inflation, interest rates and the capacity of US fiscal institutions to respond. Unless policymakers adopt a credible plan to stabilise the public finances, analysts say the strain evident in precious metals and bond markets may presage a longer, costlier adjustment for the economy.
- https://dcjournal.com/falling-off-a-fiscal-cliff-in-2026/ – Please view link – unable to able to access data
- https://www.apnews.com/article/45a61cb88eb6083a6e18389d19320c8a – The Congressional Budget Office (CBO) released a new 10-year forecast indicating a worsening U.S. fiscal outlook, with federal deficits and public debt expected to rise significantly. The deficit in 2026 is now projected to be $100 billion higher than previously estimated, with a cumulative increase of $1.4 trillion from 2026 to 2035. Public debt is anticipated to soar from 101% to 120% of GDP, exceeding historical records, largely due to increased spending on Social Security, Medicare, and debt servicing. The deterioration is partly attributed to recent policy changes, including the “One Big Beautiful Bill Act,” higher tariffs, and stringent immigration enforcement. Tariffs are projected to raise $3 trillion in revenue but spur higher inflation through 2029. The Federal Reserve isn’t expected to meet its 2% inflation target until 2030. Experts warn that growing deficits during a time of economic expansion and peace are unusual and unsustainable. Advocacy for bipartisan action includes cutting spending, increasing revenue, and addressing key cost drivers. Though deficit reduction measures have been attempted, such as President Trump’s Department of Government Efficiency, actual savings were significantly below targets. Economic leaders emphasize the urgent need for deficit stabilization in the lead-up to the 2026 elections.
- https://www.axios.com/2026/02/11/trump-tariffs-gdp-national-deficit – The Congressional Budget Office (CBO) projects that U.S. budget deficits will remain near $2 trillion annually over the next decade, equating to approximately 6% of GDP, even without a recession or other major crisis. The 2026 deficit is expected to reach $1.9 trillion, slightly up from $1.8 trillion in 2025. CBO Director Phillip Swagel warned that the current fiscal trajectory is “not sustainable.” Key contributors include last year’s “One Big, Beautiful Bill Act,” a major tax law passed under the Trump administration, which is expected to widen deficits by $4.7 trillion over ten years. Although tariff revenues have increased, they have not fully offset revenue losses from tax cuts. Additionally, servicing the national debt is projected to cost $2.1 trillion annually by 2035, or 4.6% of GDP—more than twice current levels. The CBO does anticipate a short-term boost in economic growth to 2.2% in early 2026 due to tax stimulus and the resolution of a prior government shutdown, before tapering off to 1.8% in following years.
- https://www.apnews.com/article/6f807c4aae78dcc96f29ff07a3c926f4 – As of August 2025, the U.S. national debt has reached a record $37 trillion, according to a report from the Treasury Department. This milestone arrived significantly earlier than the Congressional Budget Office had projected in 2020, largely due to heavy federal borrowing during and after the COVID-19 pandemic to mitigate its economic impacts. Spending increases under both the Trump and Biden administrations, including a recent tax cut and spending package signed into law earlier in 2025 by Trump, are projected to add $4.1 trillion more to the debt over the next decade. Experts warn of the consequences of escalating debt, including increased interest rates, which raise costs for mortgages and loans, reduce private investment, lower wages, and elevate prices of goods and services. Michael Peterson of the Peter G. Peterson Foundation noted the rapid pace of debt accumulation, with a trillion dollars now being added every five months—twice the rate of the past 25 years. Analysts from Brookings and the Committee for a Responsible Federal Budget stress urgent action is required, as continuous borrowing will further strain the federal budget and economy.
- https://www.apnews.com/article/26b1fc8a13af4537b72660c4a478dd97 – The Congressional Budget Office (CBO) has projected that the U.S. national debt will rise by $23.9 trillion over the next decade, excluding the costs of extending tax cuts proposed by President-elect Donald Trump. These tax extensions and additional cuts could add over $4 trillion to the debt. The annual budget deficit is expected to reach 6.1% of GDP by 2035, significantly above the historical average of 3.8%. Despite a slight improvement in the outlook thanks to higher taxable incomes, the federal deficit is projected to be $1.87 trillion this fiscal year. While tax revenues remain near the long-term average, spending—driven by Social Security, Medicare, and interest payments—is set to rise, especially as the population ages. The government’s total spending is projected to reach $7 trillion this fiscal year, approximately 23.3% of GDP. Discretionary spending is forecast to decline as a share of GDP, but mandatory outlays are rising rapidly. CBO Director Phillip Swagel and other experts emphasized the challenges of balancing spending and revenue, with Michael Peterson of the Peterson Foundation urging policymakers to avoid worsening the fiscal outlook.
- https://www.apnews.com/article/5f591bea21bd95eec45ba90c93c50687 – A new analysis by the nonpartisan Congressional Budget Office (CBO) reveals that the Republican-led Senate’s version of President Donald Trump’s tax bill would increase the U.S. debt by nearly $3.3 trillion between 2025 and 2034, about $1 trillion more than the House-passed version. Additionally, the bill would result in 11.8 million more Americans being uninsured by 2034, worsening the impact compared to the House bill’s estimated 10.9 million. The legislation faces significant hurdles as Republicans clash over spending cuts to Medicaid and food aid programs, designed to offset the cost of extending $3.8 trillion in Trump-era tax breaks. The Senate narrowly advanced the bill 51-49 after hours of negotiations, but further amendments are expected. Republicans challenge the CBO’s projections, using an alternative budget model that assumes the tax cuts are already permanent, suggesting the bill could reduce deficits by $500 billion. However, Democrats and some economists criticize this as misleading “magic math,” with the CBO warning that under traditional scoring, the bill would violate the Senate’s Byrd Rule by increasing deficits post-2034.
- https://www.washingtonpost.com/business/2024/06/18/national-debt-budget-projections-cbo/ – The Congressional Budget Office (CBO) projected that the federal debt will equal 122% of the United States’ annual economic output by 2034, far surpassing the high set in the aftermath of World War II. The deficit will swell to $1.9 trillion this fiscal year and keep growing until the overall national debt hits $50.7 trillion a decade from now. Much of the recent debt spike is tied to pandemic emergency spending and Trump’s 2017 tax cuts. Early pandemic stimulus legislation and executive orders added $3.6 trillion to the debt, according to the nonpartisan Committee for a Responsible Federal Budget. The Tax Cuts and Jobs Act, Trump’s 2017 law, lowered rates for individuals of almost all income levels, though it cut taxes most for the highest earners, and slashed the maximum corporate tax rate from 35 percent to 21 percent. It added $1.9 trillion to the debt, according to the group. Many of those cuts are set to expire next year, and extending them could add almost $5 trillion more to the long-term debt total, the CBO projected last month. Trump and some congressional Republicans are discussing lowering the corporate tax rate further if the GOP wins control of Washington, which could add $1 trillion to the debt. The CBO report did include a small silver lining for the country’s financial well-being. A surge in immigration exceeding federal projections will increase economic output by $8.9 trillion, or 2.4 percent, in the next decade, according to the forecast, and will lower the deficit by $900 billion. That’s because noncitizens contribute payroll taxes that fund Social Security and Medicare and other social safety net programs, but they’re ineligible to receive benefits.
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The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
7
Notes:
The article references recent projections from the Congressional Budget Office (CBO) released on February 11, 2026, regarding federal deficits and debt. These projections have been reported by multiple reputable sources, including the Associated Press and Axios, indicating that the content is current and not recycled. However, the article’s specific title and phrasing do not appear in prior publications, suggesting originality. Nonetheless, the reliance on a single source for key data points raises concerns about the independence of the information presented. The absence of corroborating sources for some claims diminishes the overall freshness score.
Quotes check
Score:
6
Notes:
The article includes direct quotes attributed to CBO Director Phillip L. Swagel and other experts. While these quotes are consistent with statements from the CBO’s February 2026 Budget and Economic Outlook, the absence of direct links to the original sources makes independent verification challenging. The lack of verifiable sources for some quotes raises concerns about their authenticity.
Source reliability
Score:
5
Notes:
The article cites the CBO’s February 2026 Budget and Economic Outlook, a reputable source. However, the article’s reliance on a single source for key data points and the absence of corroborating sources for some claims diminish its overall reliability. The lack of independent verification for certain information raises concerns about the source’s credibility.
Plausibility check
Score:
7
Notes:
The article’s claims align with known economic trends and projections, such as rising federal deficits and debt. However, the lack of corroborating sources for some claims and the absence of direct links to original sources for quotes raise questions about the article’s overall credibility.
Overall assessment
Verdict (FAIL, OPEN, PASS): FAIL
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article presents information on federal deficits and debt projections, citing the CBO’s February 2026 Budget and Economic Outlook. However, the over-reliance on a single source for key data points, the absence of corroborating sources for some claims, and the lack of direct links to original sources for quotes raise significant concerns about the article’s credibility and reliability. These issues prevent the article from meeting the necessary standards for publication.