Corporate America dodged a bullet while Uncle Sam took the hit.
US corporate net interest payments: just 0.4% of GDP—lowest in a decade. Down 1.2 points since 2022 despite the Fed hiking from 0.25% to 5.50%.
Why? Companies locked in dirt-cheap fixed rates during the pandemic. They saw the window and jumped through it.
Meanwhile, the US government? Net interest costs up 1.2 points to 3.6% of GDP—near a 10-year high. Treasury didn't lock in enough long-term debt at rock-bottom rates in 2020. Now they're bleeding as rates stay elevated.
Corporates played defense. Government didn't. The gap between smart treasury management and wishful thinking, in two charts.
US corporate net interest payments: just 0.4% of GDP—lowest in a decade. Down 1.2 points since 2022 despite the Fed hiking from 0.25% to 5.50%.
Why? Companies locked in dirt-cheap fixed rates during the pandemic. They saw the window and jumped through it.
Meanwhile, the US government? Net interest costs up 1.2 points to 3.6% of GDP—near a 10-year high. Treasury didn't lock in enough long-term debt at rock-bottom rates in 2020. Now they're bleeding as rates stay elevated.
Corporates played defense. Government didn't. The gap between smart treasury management and wishful thinking, in two charts.
