Loretta Mester from the Federal Reserve raised concerns about the unsustainable U.S. fiscal deficit, underscoring potential financial risks.
U.S. Fiscal Deficit Raises Concerns
During remarks on July 10, 2025, Loretta Mester highlighted the unsustainable trajectory of the U.S. fiscal deficit. Notably, the FY2024 deficit stands at 6.4% of GDP, posing risks to financial stability.
Markets React to Financial Instability
Mester emphasized that the growing deficit could negatively impact financial stability. She remarked, "The U.S. fiscal deficit is on an unsustainable path and could pose a financial stability risk in the future." Rising deficits could lead to higher borrowing costs and affect private investment.
Bitcoin as a Safe Asset
In light of fiscal concerns, there is an increasing interest in Bitcoin. The cryptocurrency shows resilience, trading at $111,307.71 with a 35.76% gain over the past 90 days. Investors are leaning toward safe assets amid instability, creating heightened interest in decentralized financial assets.
The situation regarding the U.S. fiscal deficit continues to raise fundamental concerns, while Bitcoin displays growth, reflecting changes in investor strategies in response to financial threats.
