The US' $34 trillion debt deficit will drive inflation and worsen 'like global warming' over the next 10 years, Bond King Bill Gross says

• High US debt levels will become an alarming problem this decade, Bill Gross told CNBC.
• Debt will compound "like global warming," he said, as the US continues to lean on deficit spending.

The US government's $34 trillion debt load may not pose an imminent threat, but expect repercussions to heat up in the coming decade, "Bond King" Bill Gross told CNBC on Wednesday.

"Two to five to 10 years down the road, with these types of deficits and the compounding type of effect of a trillion and a half dollar deficit each year, then, you know, that's a significant problem," the PIMCO co-founder said. "It will come much like global warming."

Anxiety about US overspending has returned among investors, as higher interest rates mean elevated borrowing costs. Gross warned against expectations for it to slow down anytime soon, as fiscal deficits have become a necessary component of nominal GDP growth in the country.

Already, the fed funds rate of 5.25%-5.50% has driven yields on short term T-bills to near 5%, a tremendous disparity compared to how low rates were in the prior decade.

"That compounding of short-term debt, in addition to the fives, 10s and 30s, it's a significant problem going forward," Gross said. "Another day, deeper and deeper in debt."

To deal with expanding deficits, Gross said markets are eyeing the Federal Reserve to fund them, but doing so risks sending inflation higher again, he noted.

Other Wall Street commentators have similar outlooks. Future inflationary pressures would once again mean higher interest rates, dampening growth and spurring debt higher, Research Affiliates' Chris Brightman said this month.

Without legislative action to curb overspending, the US also risks an eventual default, others have warned. One prediction noted this could happen in about 20 years, with consequences for economies around the world.