Goldman Sachs(US:GS) Goldman Sachs·2025-06-15 16:03Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The US fiscal concerns have intensified due to the "One Big Beautiful Bill Act," which is projected to increase the deficit by $2.4 trillion over the next decade, coinciding with already high levels of debt and deficit as a share of GDP [26][29] - Experts like Ray Dalio, Kenneth Rogoff, and Niall Ferguson express heightened concern about the US fiscal trajectory, indicating that the current situation is different from past fiscal worries due to higher real interest rates and unsustainable debt levels [27][28][31] - The report suggests that while tariff revenues may offset some deficit impacts, the overall fiscal position remains unsustainable in the long term [29][71] Summary by Sections US Fiscal Concerns - The US deficit and debt are at their highest levels outside of crisis periods, with interest expenses also reaching record highs [46][49] - The "One Big Beautiful Bill Act" is expected to worsen the fiscal outlook, increasing the primary deficit by approximately $2.4 trillion through 2034 [72][73] Expert Opinions - Ray Dalio warns of an impending crisis due to a "big debt cycle" where the cost of servicing debt becomes unsustainable [27] - Kenneth Rogoff highlights the rise in real interest rates as a critical factor that exacerbates the fiscal burden, predicting a potential crisis within four to five years [55][57] - Niall Ferguson notes that the US is violating "Ferguson's Law," where debt service costs now exceed defense spending, marking a significant shift in fiscal dynamics [28] Market Implications - The report anticipates that US long-end rates will likely remain high, and the Dollar is expected to weaken further as US exceptionalism diminishes [34][36] - Experts recommend diversifying investments across asset classes and countries with strong fiscal positions while underweighting debt assets [34][44]