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IMF sees no pressure on US debt now, but debt growth and short-term financing a concern

Published 07/16/2024, 10:12 AM
Updated 07/16/2024, 10:16 AM
© Reuters. FILE PHOTO: Pierre-Olivier Gourinchas, Director and Economic Counsellor, Research Department IMF, speaks during an interview with Reuters on the first day of the annual meeting of the International Monetary Fund and the World Bank, following last month's
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WASHINGTON (Reuters) - The International Monetary Fund does not see any current market pressure U.S. Treasury debt but has longer-term concerns about the growth of U.S. debt and reliance on short-term financing, IMF Chief Economist Pierre-Olivier Gourinchas said on Tuesday.

© Reuters. FILE PHOTO: Pierre-Olivier Gourinchas, Director and Economic Counsellor, Research Department IMF, speaks during an interview with Reuters on the first day of the annual meeting of the International Monetary Fund and the World Bank, following last month's deadly earthquake, in Marrakech, Morocco, October 9, 2023. REUTERS/Susana Vera/File Photo

Gourinchas told a news conference on the IMF's latest global growth forecasts that with growing debt and a reliance on shorter-term funding, there could be vulnerabilities introduced by having to refinance more often.

"The fact that the U.S. Treasury has moved towards more short term finance reflect the fact that it's also trying to economize on the cost of funding," Gourinchas said. "It's usually a little bit cheaper on the short end of the curve, but it's also a little bit riskier."

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