Endgame: Interest On US Debt Skyrockets Above $1 Trillion For The First Time Ever
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(But the FED is still piling on the “higher for longer” mantra….total bullshit as wanted to be CA Governor simply the latest gaslighting, disingenuous FED asshoe yesterday and in a few years when they actually release the full text of those FED meetings it will be guaranteed they were talking about it all fuggen year)
Fed’s Kashkari: No discussion about interest-rate cuts
https://www.msn.com/en-us/money/markets/fed-s-kashkari-no-discussion-about-interest-rate-cuts/ar-AA1jwRtx
Back in July, when we last looked at the unprecedented horror show that is the US budget deficit - and concluded correctly, long before the Q2 Quarterly Refunding Announcement, that debt issuance was about to explode and yields would soar - we warned that the debt Rubicon was about to be crossed and "US Debt Interest Payments Are About To Hit $1 Trillion."
Fast forward to today when the endgame has apparently arrived: according to the Treasury's own calculations, total interest is now over $1 trillion(or $1.027 trillion to be precise).
We calculated this by multiplying the average interest rate on marketable US Treasury debt (which according to the Treasury is 3.096% as of Oct 31) by the $26.003 trillion in marketable US debt (as of Oct 31) which nets off to $805 billion, and adding to this non-marketable debt interest (which as of Oct 31 was 2.884% multiplied by the amount of non-marketable debt which is $7.696 trillion) and which in turn is an additional $222 billion in interest. Add across and you get $1.027 trillion. Naturally, this calculation of estimated real-time interest costs - which is entirely based on Treasury data - is different than what the Treasury actually paid. Interest costs in the fiscal year that ended Sept. 30 ultimately totaled $879.3 billion, up from $717.6 billion the previous year and about 14% of total outlays, however that number is merely lagging what the pro forma print currently is, and will inevitably catch up to it, and then lag on the other side even as pro forma interest payment start dropping (once interest rates plunge after the next QE/YCC is launched)which I will add have been predicting in here for some time nao…they simply have no choice because they played the “let’s ignore it” game remember “it’s transitory”?although they likely did that so they could play the waiting game to start the raises only to begin to lower them heading into the ‘meat’ of the election season (hat tip to Charles Payne as only other person-at the same time-that echoed those thoughts. Fans of exponential functions, we got you covered: the unprecedented surge in both interest rates and interest expense in the past two years means thattotal US interest has doubled since April 2022and that's with the inherent lag in interest catch up - as a reminder, the vast majority of 5, 7, 10 and 30 year debt is still locked in at much lower interest rates, and as such, rates will continue to rise as all of the existing debt rolls into much higher rates over the coming years. Looking ahead, the staggering surge in both yields and total long-term Treasuries in recent months confirms the government will continue to face an escalating interest bill. As a reminder, we were the first to point out that it took just one month after US federal debt first rose above $33 trillion for the first time, to spike by another $600 billion. Some more context: total world debt (government, corporate & household) hit a record $227tn in Q1’23, double from $110tn in 2007 & $0.5tn in 1952.
And then there was this warning from the TBAC which very tongue-in-cheek said that "Interest rate expense, as % of GDP, is likely to rise over the medium term", and also over every other term.
https://www.zerohedge.com/markets/endgame-interest-us-debt-skyrockets-above-1-trillion-first-time-ever