U.S. Margin Debt Hits Record $1.5 Trillion as Leverage Surges
U.S. margin debt reached an all-time high of $1.5 trillion in June, up 49% year-on-year, as leverage relative to GDP exceeded dot-com era peaks and fueled concerns over market stability.
Margin debt in the United States soared to a record $1.5 trillion in June, marking a 49% increase from a year earlier. The $86.5 billion monthly rise pushed the leverage ratio relative to nominal U.S. GDP to an unprecedented level, surpassing highs seen during the dot-com bubble and the 2021 stock market boom.
Since the fourth quarter of 2023, margin debt has surged by 136%, driven by expectations of Federal Reserve interest-rate cuts and an increase in aggressive risk-taking among investors.
Historically, such rapid expansions in leverage have often preceded periods of heightened market volatility and significant corrections, raising questions about the durability of the current equity rally.
Source: First Squawk