Henry Paulson Warns of U.S. Treasury Demand Collapse, Urges Emergency Plan

Key Facts

Former U.S. Treasury Secretary Henry Paulson has issued a stark warning regarding the stability of the Treasury market as national debt hits $39 trillion, describing a potential crash as 'vicious.' He called for a 'break-the-glass' emergency plan to address liquidity risks that could undermine the world's primary safe-haven asset. Expanding on global risks, Paulson warned that the war in Iran is likely to push inflation higher and keep interest rates elevated for an extended period. He noted that the conflict is exerting significant pressure on global energy markets, which will strain diverse industries ranging from airlines to agriculture. These remarks highlight a complex intersection of fiscal sustainability concerns and geopolitical shocks. Market participants remain on high alert as energy price volatility threatens to complicate the Federal Reserve's path forward.

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