September 22, 2026
Howard Marks dismissed America's $40 trillion federal debt as a reason to dump stocks, sparking a half trillion dollar equity rally.
What happened
Billionaire investor Howard Marks argued that the roughly $40 trillion US debt pile does not justify selling stocks. His comments coincided with a roughly $500 billion increase in market value.
Why it matters
When a respected credit investor says that the sheer scale of sovereign borrowing is not a sell signal, it can calm an anxiety that drives money out of equity ETFs and into cash or bonds. His view counters the fear that ballooning debt forces harsh spending cuts or a buyer’s strike on Treasuries, which would hammer the economy and corporate profits.
The case against
The counterargument holds that a $40 trillion liability, paired with steady reserve diversification into gold, slowly raises the risk premium on dollar assets. If foreign holders of Treasuries grow more reluctant, yields can spike abruptly, tightening financial conditions and punishing stocks regardless of today’s calm mood.
What settles it
A sustained rise in Treasury yields that breaks correlation with falling equity prices would signal the debt worry is overriding Marks’s reassurance.