Bank of America says the $35.751 trillion national debt will rise to “unprecedented levels” in the years ahead, according to a new report.
The banks’ analysts just sent a note to clients stating the US will be forced to pay increasing interest on the debt as spending once again ramps up, reports Investing.com.
And although the Fed has started lowering interest rates, the bank notes lawmakers are still looking to increase spending.
The mounting fiscal pressures will likely boost gold and make it an “attractive asset” to investors, say the strategists.
Specifically, the bank points to IMF numbers forecasting future spending on climate, defense and “demographic challenges” may increase America’s spending as much as 8% of GDP by 2030.
The bank says it’s target for the precious metal is $3,000 per ounce.
Although BofA is bullish, the bank cautions gold’s price may be limited in the short-term as investors weigh the impact of a slower pace of rate cuts from the Federal Reserve and the possibility of a meandering “no-landing” scenario for the economy.
Generated Image: Midjourney