Trump's Unconventional Debt Strategy: A New Era of Fiscal Policy?

Investors are closely monitoring Donald Trump's unconventional strategies to manage the escalating U.S. debt without reducing popular benefits. Proposals include coercing foreign governments into swapping Treasuries for cheaper bonds and selling residency cards to wealthy individuals. These strategies have sparked debates about their feasibility and impact on U.S. creditworthiness.

Donald Trump is under scrutiny as investors evaluate his unorthodox methods to tackle the burgeoning U.S. debt, while maintaining health and retirement benefits. The president's strategies include coercing nations into swapping Treasuries for lower-cost bonds and selling residency privileges to affluent foreigners at a hefty price.

U.S. debt, reaching $36 trillion, surpasses 120% of GDP. Trump's administration has aggressively aimed to reduce this, implementing budget cuts through the Department of Government Efficiency and raising revenue by imposing tariffs on trading partners. However, concerns linger about the viability of these proposals, fearing potential impacts on U.S. creditworthiness.

Despite initial investor trepidation, recent drops in long-term U.S. interest rates suggest market confidence in Trump's policies. However, doubts persist, with some attributing market fluctuations to heightened uncertainty rather than optimism. Trump's administration must now demonstrate that their strategies effectively control the debt to maintain investor trust.

(With inputs from agencies.)