US National Debt Surge Threatens Israeli Economy and Citizen Wallets

The United States national debt has surpassed the historic milestone of $40 trillion, posing significant risks to the global financial system and Israel's economy, according to the Maariv publication. Experts warn that the rapid increase in American borrowing and rising interest rates could impact financial markets worldwide.

The US government is issuing new bonds at an unprecedented rate to cover its budget deficit and interest payments, which have exceeded $1 trillion for the first time. This policy is draining liquidity from global markets and increasing the yield on securities, leading investors to demand higher compensation for risks. Consequently, the cost of borrowing for other nations, including Israel, is directly affected.

For Israeli citizens, this translates to more expensive loans and mortgages, as well as pressure on pension savings, which are closely tied to the US stock market. Local regulators are implementing preemptive measures, requiring institutional investors to maintain currency reserves to hedge against sharp fluctuations on Wall Street.

Experts suggest that key drivers of the Israeli economy, such as the high-tech sector and the real estate market, could suffer. Increased borrowing costs may dampen business activity and investment in these crucial areas.