Forbes reported that U.S. President Donald Trump, in an interview with Time magazine, said that 「a certain amount of inflation would also pay off debt very quickly,」 reviving debate over whether the United States could reduce its real debt burden through nominal growth and inflation. The report said federal debt has climbed past $40 trillion, more than doubling over the past decade, while interest costs have kept rising after the Federal Reserve’s rate hikes. Trump, U.S. Treasury Secretary Scott Bessent, and Elon Musk have previously pointed to technology-driven economic growth as a key way to ease debt pressure. At the same time, the market has turned back to the so-called debasement trade, where investors buy assets such as gold and Bitcoin to hedge against a decline in fiat purchasing power. Forbes, citing Bitfire Research, said the long-term case for Bitcoin as a hedge against currency debasement remains intact, though short-term price moves may still be shaped by interest-rate policy and U.S. dollar liquidity. The report also noted that PCE inflation rose 3.4% from a year earlier, above the Fed’s 2% target, while markets see about a 70% chance that the Fed will leave rates unchanged at its late-October meeting.
Forbes reported that U.S. President Donald Trump said in an interview with Time magazine that 「a certain amount of inflation would also pay off debt very quickly,」 prompting renewed discussion over whether the United States could use nominal economic growth and inflation to reduce the real burden of its debt.
The report said U.S. federal debt has exceeded $40 trillion and has more than doubled over the past decade. Interest expenses have also continued to rise after the Federal Reserve raised rates.
Trump, U.S. Treasury Secretary Scott Bessent, and Elon Musk have previously said that technology-driven economic growth is an important path for addressing debt pressure.
Bitcoin debasement-trade narrative returns to focus
Against that backdrop, the market has recently revisited the 「debasement trade,」 in which investors allocate to assets such as gold and Bitcoin to hedge against a decline in fiat purchasing power.
Forbes said Bitcoin has risen about 300% from its 2023 low, but remains about 30% below the $126,000 peak it reached in 2025.
Citing Bitfire Research, Forbes said the long-term thesis for Bitcoin as a hedge against fiat debasement remains in place, although short-term price action may still be affected by interest-rate policy and U.S. dollar liquidity.
Inflation and rate outlook
The Personal Consumption Expenditures price index, the Federal Reserve’s preferred inflation gauge, showed that U.S. prices were up 3.4% from a year earlier, still above the Fed’s 2% target.
Markets are pricing in about a 70% probability that the Federal Reserve will keep rates unchanged at its meeting at the end of October.
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