Top bankers at the International Institute of Finance (IIF) warn that under Trump's leadership, USA bonds could "explode".

Analysts at this Washington-based research institute state that the incoming president plans to cut taxes without reducing spending inequality, which will cause USA bonds to rise from the current level of around 100% of GDP to over 135% in ten years.

Inflation may also rise, as Trump stimulates spending by imposing tariffs on foreign-manufactured commodities, making imported goods more expensive.

USA bonds are already close to $36 trillion, the International Institute of Finance warns that if Trump's tax reduction plan results in more losses for the US Treasury than expected, debt could exceed 150% of GDP.

Trump's plan includes making overtime pay and tip income tax-free. The International Institute of Finance states that such policies will boost spending but also reignite inflation.

The elected president has stated that he wants to increase taxes on imported goods to provide additional revenue for the Treasury and hopes to stimulate local manufacturing. However, this will also make foreign-manufactured goods more expensive, exacerbating inflation.

The International Institute of Finance predicts that this price pressure may force the Federal Reserve to abandon its planned interest rate cuts, thereby raising borrowing costs for a longer period.

Analysts say, "The recent rate cut is part of the Fed's support for growth strategies, but fiscal expansion under the leadership of Trump may force the Fed to reconsider this path, especially if inflation risks appear faster than expected."

The long-term borrowing costs in the financial market have risen significantly as people expect U.S. debt to increase and interest rates to rise for a longer period. The yield on the 30-year U.S. Treasury bonds has risen from below 4% in September to over 4.5%.

The International Monetary Fund specifically points out that the recent surge in the 30-year U.S. Treasury bond yields indicates investors' concerns about the sustainability of continuously expanding debt burdens, as well as the possibility of reigniting inflation with increasing fiscal pressures.

Trump has appointed billionaire owner of Tesla and SpaceX, Musk, to lead a new government efficiency department aimed at offsetting the impact of tax cuts by cutting federal spending. However, neither has presented detailed plans on how to reduce expenditures.

Musk had previously stated that he could save $2 trillion for the government. Economists express doubts about the feasibility of this approach. Independent economist and Niesr researcher Paul Mortimer-Lee pointed out that such massive cuts would wipe out budgets equivalent to transportation, education, housing, social services, science, and the environment, and would also destroy Medicare and other benefits.

U.S. Treasuries have traditionally been seen as a safe haven for global investors, who often allocate funds to these bonds during global crises. This, coupled with the U.S. dollar's status as the world's reserve currency, gives the U.S. government more borrowing power compared to other countries.

However, the International Monetary Fund states that Trump's plans could expand this unusual borrowing capacity. The report states, "Higher yields indicate that while investors see the potential for immediate growth, they are increasingly concerned about the inflation pressures and fiscal sustainability issues that may arise under such aggressive fiscal policy. Fiscal stimulus, higher tariffs, and stricter immigration policies are expected to drive inflation pressures, which could limit the Fed's ability to maintain an accommodative stance."

The International Monetary Fund points out that the U.S. economy's agriculture, construction, and medical sectors "heavily rely on immigrant workers," and targeting this group under Trump's leadership may "exert additional upward pressure on prices."