On the Flying Bridge August 18, 2024
While we all breathlessly wait to see if/when the Federal Reserve will lower the fed funds interest rate, it was announced recently that the total U.S. federal debt has increased by $1 trillion so far this year to $35.171 trillion. Over the last 12 months just the interest payments on that debt exceeded $1 trillion and now accounts for 13.4% of overall government expenditures. If rates remain unchanged, annual interest payments will be $1.4 trillion by next summer. A 200-basis point reduction to ~3.0% would save taxpayers $200 billion next year.
Projected Interest Payments on Federal Debt
Source: Bloomberg
This level of debt is reflective of a chronic glutinous indulgence of leverage in nearly every aspect of our lives. The...
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