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Tom Barkin, President and CEO of the Federal Reserve Bank of Richmond, is painting a picture of an American economy that keeps defying the skeptics. Speaking at the Greenville Chamber’s State of Greenville event on August 13, Barkin called the economy’s staying power the first “mystery” worth examining, noting that real GDP growth has averaged 2.5% annually since 2023, a pace that exceeds longer-run estimates most economists had penciled in.
But the optimism comes with an asterisk the size of $40 trillion. That’s how much US public debt has ballooned to, and Barkin isn’t shy about flagging it as the thing that could eventually spoil the party.
The numbers behind the resilience
The labor market continues to be the economy’s strongest argument against recession fears. The unemployment rate sat at 4.1% in July, marking the 58th consecutive month below 4.5%. That’s the longest such streak in US history.
Consumer spending, meanwhile, still accounts for nearly 70% of GDP.
Business investment tells an even more striking story. Real private nonresidential fixed investment grew at a 9.5% annualized rate in the first half of 2026. For context, the pre-pandemic average was 5.8%.
Barkin described the economy as “remarkably resilient” and suggested that some of the uncertainty hanging over markets and businesses has begun to subside.
The $40 trillion question
US public debt has surpassed $40 trillion, and the Richmond Fed president warned that a waning appetite among investors for US government bonds could trigger what he called a “reckoning.”
Barkin’s comments also speak to the delicate position the Fed occupies. The central bank must balance employment stability with price stability, and both of those mandates become harder to fulfill when the federal government’s borrowing costs start competing with the private sector for capital.
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