Bonds & Rates
Home›Bonds & Rates›Economy›US interest costs hit record levels as Treasury yields…
US interest costs hit record levels as Treasury yields rise
Annual interest expense is now 18.5% of federal revenue, up from a prior 1991 record of 18.4%, and totals about $1.25 trillion.
Yahoo Finance reports that rising Treasury yields have pushed up US interest payments on roughly $40 trillion in federal debt, pushing annual interest expense to a record 18.5% of federal government revenue. Doubleline analysis cited by Yahoo Finance says the new share tops the previous peak of 18.4% set in 1991, and that interest expense has surged to about $1.25 trillion. The outlet also notes strategists at the Kobeissi Letter warned the US debt situation is moving into uncharted territory. According to the analysis summarized by Yahoo Finance, the rise means nearly one out of every five dollars collected by the government goes solely to servicing existing national debt. It also highlights that the higher debt service burden can crowd out spending for programs such as defense, infrastructure, and Social Security, while potentially forcing additional borrowing to cover interest costs. Yahoo Finance further points to concerns about reduced flexibility for future fiscal stimulus during recessions as rates remain elevated on the 10-year and 30-year Treasurys. Fed Watch Advisors founder Ben Emons is quoted as saying the milestone reflects growth in both the debt and interest burden, while noting markets may still view the $40 trillion level as manageable because the US is borrowing at a weighted average rate near 3.5%.