The David Lin Report U.S. Debt To Lose Risk-Free Status? Unprecedented Shift Coming | Komal Sri-Kumar
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Apr 28, 2025 
Komal Sri-Kumar, President of Sri-Kumar Global Strategies and a global markets expert, dives into the shifting landscape of U.S. economic policies and their global implications. They discuss the risks of U.S. debt losing its risk-free status due to escalating tariffs and trade tensions, as well as the Fed's monetary policies. Komal highlights the importance of safe haven assets like gold during uncertainty and examines the declining U.S. dollar's impact on purchasing power and investor strategies for diversifying into international markets.
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U.S. Debt Sovereign Risk Introduced
- President Trump's comments and advisors' suggestions introduced sovereign risk to U.S. Treasury paper.
- This risk challenged the conventional view of U.S. debt as risk-free, unsettling markets and raising yields.
High Tariffs Impact Markets Negatively
- If tariffs remain high, equities will crash and 10-year Treasury yields will rise.
- This rise is driven by growth expectations, inflationary expectations, and new sovereign risk concerns.
Risk-Free Status of US Debt Challenged
- U.S. debt could lose risk-free status without restructuring or tariff policy changes.
- Any potential downgrade likely won't go below investment grade but would increase borrowing costs.