(Bloomberg) — Steven Mnuchin, the former U.S. Treasury secretary, warned about the risks of breaching the debt ceiling, overspending and concerns that it could further fuel inflation.
“We could easily end up with 3.5% 10-year Treasuries, which again just increases the cost of the national debt and creates budget issues,” Mnuchin said Thursday at the Bloomberg Invest Global virtual conference.
Mnuchin said that the positive news right now is that the U.S. economy is rebounding and he supports the bipartisan infrastructure bill. However, he warned that debt-to-GDP could be excessive.
Mnuchin, 58, a banker, private equity investor and movie producer before being tapped as Treasury secretary during the Trump administration, recently returned to investing. His Liberty Strategic Capital has raised about $2.5 billion for private equity investments, with most of the money coming from sovereign wealth funds in the Middle East, including Saudi Arabia’s Public Investment Fund, people with knowledge of the matter have said.
Liberty was founded this year with a focus on technology, financial services and fintech, as well as new forms of content, according to a statement in July announcing a $200 million investment in a cybersecurity business.
He also commented on the risks from stablecoins, saying they should be regulated, with the underlying funds put into banks with immediate liquidity.
“They shouldn’t be like casino chips,” Mnuchin said. “If you are going to issue a stablecoin, the actual money should go be held in a regulated bank, in a trust account and the people who hold the stablecoins should be able to exchange those for real dollars at any time.”
Read more: Stablecoin Tether Grows Into Crypto World’s $69 Billion Mystery
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