Bank of America strategist Michael Hartnett warns that ballooning U.S. debt could make bonds a less attractive bet

U.S. government debt is on track to keep expanding toward unprecedented levels, and Bank of America’s chief investment strategist, Michael Hartnett, is using that trajectory to argue for avoiding bonds, a position he has previously labeled “Anything But Bonds.”

In commentary published by Yahoo Finance, Hartnett is quoted forecasting that the national debt will approach $40 trillion and eventually rise to $50 trillion by July 2029. The central message is that the scale and persistence of borrowing could pressure bond performance, especially if investors expect higher term premiums or less favorable fundamentals for fixed income.

Hartnett’s argument is not presented as a single data point, but as an extension of a broader framework: if the U.S. keeps accumulating debt at a fast pace, demand and pricing dynamics in the bond market may become less supportive for investors who rely on duration, even when interest rates are not at historical highs.

The “Anything But Bonds” strategy, as characterized in the report, is essentially a portfolio posture that looks to reduce or avoid exposure to traditional bond holdings in favor of assets Hartnett believes may respond better to macro conditions tied to fiscal expansion. Hartnett’s recommendation is framed as consistent with the idea that debt growth can be a headwind for bond returns.

The timing of the debt milestones matters to the market in two ways. First, debt levels influence expectations for future issuance, which can affect how quickly supply and investor demand equilibrate. Second, the projections Hartnett points to are meant to shape how investors think about long-run inflation expectations and real-rate pricing, both of which feed into longer-dated bond valuations.

Bank of America’s note does not, in the published excerpt, lay out detailed mechanics on exactly which part of the bond market Hartnett expects to underperform most, nor does it quantify how the strategy would be implemented in practice across specific instruments. It also does not provide a forecast range or scenario analysis in the excerpt, so readers are left to interpret the debt projections as a directional input into the strategist’s broader “avoid bonds” stance.

Even so, the debt discussion taps into a familiar investor concern: when fiscal borrowing accelerates, bond markets can face shifting risk. Markets may price in higher yields over time, a greater likelihood of supply absorption challenges, or an increased sensitivity to policy expectations, all of which can influence equity and credit sentiment as well.