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Tuesday, November 29, 2022

For the first time ever, the national debt has exceeded $31 trillion, and interest expenditure is projected to increase by $1 trillion over 10 years.

US According to the Treasury Department, the U.S.National debtOverall, the $31 trillion mark was crossed for the first time on Tuesday, whenirrigatedBy repeatedly raising interest rates to suppress inflation, the U.S. The cost of the loan will be higher.

The New York Times reported that the Peter G. Peterson Foundation, which trumpetes deficit reduction, estimates that higherRate of interestThis could increase the federal government’s interest payments by $1 trillion over 10 years. This is in addition to the record cost of the $8.1 trillion loan estimated by the Congressional Budget Office in May. If interest rates on the US Treasury rise 1 percentage point over the next few years compared to projections from the Congressional Budget Office, interest payments could exceed defense spending by 2029.

US The new data on the Treasury comes at a time of economic turmoil, with investors oscillating between fears of a global recession and optimism that a recession may be avoided. US stocks closed up 3 percent on Tuesday, extending gains from the previous session. The rebound was partly due to a government report showing signs of a cooling in the labor market, which investors took as a sign that the Federal Reserve’s rate hike may soon slow.

Peterson Foundation chief executive Michael A. Peterson said many Americans are reducing the growing national debt, in part because interest rates were low.

The Fed cut interest rates to nearly zero during the pandemic, but today the federal funds rate is between 3% and 3.25%, and according to the central bank’s latest forecast, rates could climb to 4.6% by the end of next year, This exceeds the prior forecast of 3.8%.

The New York Times explained that federal loans differ from 30-year mortgages that are repaid at a fixed interest rate. The federal government continues to issue new loans, which means the cost of borrowing will rise and fall along with market interest rates.

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