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Bank of America predicts that the US government's annual interest payments could reach $1.6 trillion by December if the Fed doesn't cut rates. The US Treasury's interest payments have already doubled from $584 billion in March 2020 to $1.1 trillion in February 2024, hitting an all-time high. Analysts suggest that if the Fed maintains rates, federal interest expenses could rise by $500 billion in a year, but cutting rates by 1.5% could limit the increase to $100 billion.
If the Fed keeps rates steady, then federal interest expense will increase $500B throughout the year. If the Fed cuts rates by 1.5% then they will increase interest expense by only $100 billion. But if they do that, they increase the risk of oil price re-acceleration. https://t.co/fCSdf2Nqbd
"The interest cost on US Government Debt is projected to hit $1.6T by the end of 2024. This is exactly the case we've been making about why the Fed is willing to live with higher inflation and cut rates this year". - @AyeshaTariq https://t.co/D7uAOpYU0b
U.S. Treasury has now paid an all-time high of $1.1 Trillion in interest payments over the last year, almost double the previous all-time high during the onset of COVID https://t.co/aG69ndeLNv