Goldman Sachs President of Beijing Worldia Diamond Tools warns: the risk of US debt is now surpassing tariffs to become the focus of the market.

At the Bernstein Strategic Decision Conference, Goldman Sachs Group President John Lund warned that the focus of the bond market is shifting from the trade dispute to the rapidly rising government debt in the United States. Lund, who is seen as a top candidate for the next CEO of Goldman Sachs, bluntly stated: "The biggest macroeconomic risk at present is not tariffs, but the U.S. budget debate and fiscal situation." Lund pointed out that the surge in U.S. Treasury issuance is pushing long-term interest rates higher, especially the 30-year Treasury yield which has reached its highest level in nearly twenty years. This trend not only increases the burden of government debt repayment, but also increases the risks of expanding fiscal deficits and rising overall economic financing costs. It is worth noting that his remarks come at a time when the Trump administration and Congress are engaged in a game over tax legislation, causing widespread market concerns that related policies may further deteriorate the U.S. fiscal outlook. Similarly, Goldman Sachs Vice Chairman and former Dallas Federal Reserve President Rob Kaplan also supported this view in an interview during the same period. He revealed that institutional clients' focus on the 10-year Treasury yield has surpassed tracking of the federal funds rate, reflecting the market's deep concerns about long-term fiscal sustainability. Despite warning about the debt issue, Lund still acknowledges the resilience of the U.S. economy, stating: "The continued strong performance of U.S. consumers is indeed beyond expectations and this economic resilience should not be ignored." However, he also admitted that due to fluctuations in trade policies, Goldman Sachs' investment banking revenue in the second quarter fell compared to the first quarter, which aligns with analysts' previous expectations. Amid market volatility, Lund has identified positive signals. He disclosed that Goldman Sachs successfully completed 8 IPO pricing transactions last week, stating that "this is an important sign of market recovery," and maintaining an optimistic outlook on the equity capital market. This stance amid the backdrop of soaring U.S. bond yields reveals a new understanding of the U.S. economy by top Wall Street investment banks: while the trade dispute continues to disrupt the market, the quietly expanding government debt may be brewing more systemic risks that are worth noting.