Capital Markets Summer 2022: Revealing Recession Patterns

III

Solid Balance Sheets Economic Crosscurrents

• Huge fiscal stimulus and easy financial conditions drove a surge in U.S. debt

• However, the cost to service the private and federal debt is not high relative to history

I

II

U.S. Debt Levels Are High…

…But The U.S. Debt Service Burden Is Not

300%

70

20%

3%

60

III

Federal Interest % of GDP

16%

Total U.S. Debt ($ Trillions)

50

250%

2%

12%

40

IV

30

8%

200%

1%

20

4%

U.S. Debt Service Ratio (Households & Corporations)

V

10

U.S. Debt % of GDP (Government, Households & Corporations)

150%

0

0%

0%

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

2021

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

2021

Source: Bank for International Settlements, Congressional Budget Office, and Alger estimates. The debt service ratio reflects the share of income used to service debt (interest and principal).

21