America’s Debt Story

Andrew Sheets, head of corporate credit research at Morgan Stanley, discusses the historical context of U.S. debt, contrasting the current trajectories of corporate and federal debt. He notes the U.S. government's substantial borrowing and the potential for increased risk premiums on longer-term bonds, while highlighting the relatively strong position of corporate balance sheets. Sheets observes a divergence between corporate and government borrowing trends, suggesting that this difference could keep the spread between what companies and the government pay lower than otherwise expected, except for low-rated borrowers. The discussion connects the historical context of U.S. debt with current economic trends, using the Independence Day holiday as a thematic backdrop.