US debt on ‘unsustainable’ path, admits Scott Bessent

US Treasury secretary Scott Bessent has warned that America’s government debt is on an “unsustainable” path.

Donald Trump’s finance chief admitted that his department’s borrowing limit is on a “warning track”, as he promised to give guidance over when the US government would run out of money.

Despite nearing its debt ceiling, he said that the US government would never default on its debts, which currently stand at $36.2 trillion (£27.1 trillion).

The debt ceiling is the legal limit that the US Congress permits the government to borrow.

Mr Bessent told a House of Representatives committee: “We do not have a revenue problem: we have a spending problem. We have to bring this spending under control.”

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German shares trimmed early losses today after conservative leader Friedrich Merz was elected chancellor during a second vote in parliament after an unexpected initial setback.

Germany’s Dax index ended 0.5pc lower, after falling as much as 2pc earlier when Mr Merz’s new alliance with the centre-Left Social Democrats was dealt a surprise defeat in the first attempt.

“It’s very un-German because we know Germany particularly for its political stability. Until recently, it would have been unthinkable that parliament would not vote immediately for the ... candidate,” said Teeuwe Mevissen, senior market economist at Rabobank.

Mark Carney, the Canadian prime minister, has said parts of the United States-Mexico-Canada Agreement (USMCA), signed during Donald Trump’s first term, will have to change as the US president also indicated it could change.

Mr Trump said he would “possibly” start to renegotiate the agreement.

The comments came as the leaders of two neighbouring countries met at the White House.

Donald Trump has said that China want to negotiate a trade deal and suggested he would hold discussions with Chinese president Xi Jinping soon.

It came as billionaire hedge fund manager Paul Tudor Jones predicted that Mr Trump would cut China tariffs by half but said that this would not prevent harm to the stock market.

He told CNBC: “You have Trump, who’s locked in on tariffs; you have the Fed, who’s locked in on not cutting rates.

“That’s not good for the stock market.”

Wall Street fell this afternoon as investors tried to navigate the uncertainty surrounding Donald Trump’s tariffs, while awaiting the Federal Reserve’s interest rate decision this week.