Ray Dalio warns of glut in debt, equity supply as US debt burden climbs

Billionaire investor Ray Dalio has warned, according to Mettis Global, that the supply of debt and equity is likely to far outstrip demand for it. In an X post, he said figures and bond market moves have largely matched the template of his book How Countries Go Broke, published in June 2025. He argued that both conditions behind a country going broke, namely excess debt supply and debt service squeezing out other spending, are already visible in the United States.

Marketable Treasuries stood at about $32tr by late September 2026, up 8% from a year earlier. Bills now make up roughly half of expected issuance, compared with a traditional level of about 20%, which raises rollover risk and makes servicing the debt more expensive when interest rates climb. Foreigners hold 32% of Treasuries and the Federal Reserve holds 14%, a combined share of nearly half that the post called unhealthy. China and Japan have also moved away from buying and are now cutting holdings.

Dalio also pointed to rising interest costs, with federal debt expected to equal 579% of government revenue in 2026 and net interest outlays up $78bn, or 10%, over the first three quarters of FY2026. Gross corporate bond issuance has climbed almost 30% this year, driven by AI investment, while equity issuance has reached a $1.8tr annualised pace. He added that rates have risen sharply while stocks, credit spreads and the economy have yet to show weakness.