The increased failure to repay comes on the back of gloomy economic sentiment in the US, where a closely watched measure of consumers’ confidence last week fell to its second-lowest level on record. US President Donald Trump’s trade war has driven expectations of higher inflation

“If the tariffs are fully implemented, the US will need to sell its future debt… at lower prices and higher yields,” Smetters said. “More tax cuts, instead of helping offset some of the negative effects of tariffs, will add to the debt at a time when it will become more costly to do so.”