Tag Archives: US Debt

Interest on massive US debt, which is at $35.3 Trillion, is running at $3 Billion per day

Interest-on-US-debt-chart

Important Takeaways:

  • With U.S. debt now at $35.3 trillion, the cost of paying the interest on all that borrowing has soared recently and now averages out to $3 billion a day, according to Apollo chief economist Torsten Sløk.
  • And that includes Saturdays and Sundays, he pointed out in a note on Tuesday.
  • The daily interest expense has doubled since 2020 and is up from $2 trillion about two years ago. That’s when the Federal Reserve began its campaign of aggressive rate hikes to rein in inflation.
  • In the process, that made servicing U.S. debt more costly as Treasury bonds paid out higher yields. But with the Fed now poised to start cutting rates later this month, the reverse can happen.
  • “If the Fed cuts interest rates by 1%-point and the entire yield curve declines by 1%-point, then daily interest expenses will decline from $3 billion per day to $2.5 billion per day,” Sløk estimated.
  • Meanwhile, the federal government closes out its fiscal year at the end of this month, and the year-to-date cost of paying interest on U.S. debt was already at $1 trillion months ago.

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Bank of America CEO says hope is no strategy, best to be prepared for US debt default

Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • The CEO of America’s second-largest bank is preparing for possible US debt default
  • Congress is once again bickering about raising the debt ceiling, the amount of money the US government can borrow to pay its bills on time. And that means that Corporate America has to be ready for the worst.
  • The CEO of Bank of America (BAC), America’s second-largest bank, told CNN he hopes lawmakers resolve their issues, because the market and economy love stability. Yet defaulting on the country’s debt remains a possibility that cannot be ignored.
  • “We have to be prepared for that, not only in this country but in other countries around the world,” Bank of America CEO Brian Moynihan told Poppy Harlow on “CNN This Morning” Monday. “You hope it doesn’t happen, but hope is not a strategy — so you prepare for it.”

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