📊 The US spent US$ 1,3 trillion just in debt interest over the last 12 months.
This is already the second-largest government expense.
It passed defense. It passed health.
And it has more than doubled since 2021.
At the current pace, it will surpass Social Security and become THE LARGEST expense in the country by 2028.
Now connect that with the Fed’s current interest rates.
A large part of the US debt stock is short-term and needs to be rolled over at today’s rates.
Each additional percentage point in interest becomes a required expense in the following year’s budget.
Monetary tightening today is a fiscal hole tomorrow.
The Fed can even raise rates today, but the room for a cycle of several hikes is very limited—not due to politics, but due to fiscal math.
This is already the second-largest government expense.
It passed defense. It passed health.
And it has more than doubled since 2021.
At the current pace, it will surpass Social Security and become THE LARGEST expense in the country by 2028.
Now connect that with the Fed’s current interest rates.
A large part of the US debt stock is short-term and needs to be rolled over at today’s rates.
Each additional percentage point in interest becomes a required expense in the following year’s budget.
Monetary tightening today is a fiscal hole tomorrow.
The Fed can even raise rates today, but the room for a cycle of several hikes is very limited—not due to politics, but due to fiscal math.
