US Faces $669 Billion Interest Payment on National Debt, Reports Nonprofit
An organization established by billionaire Peter G. Peterson asserts that the United States government will face a significant increase in interest payments due to rising interest rates this year.
As per a report from the Peterson Foundation, the total payments made by the US government this year will amount to $6.4 trillion, surpassing last year’s federal outlays by $81 billion.
The surge in payments can be largely attributed to the Federal Reserve’s aggressive approach to increasing interest rates over the past year. Before the recent pause, the Fed implemented ten consecutive rate hikes within 14 months, resulting in a benchmark interest rate of 5.08%—a level not observed since 2007.
According to the Peterson Foundation, the US government is projected to allocate an additional $187 billion this year solely for interest payments on its expanding debt.
In 2023, the government’s interest payment on federal debt is projected to rise to $663 billion, accounting for 2.5% of GDP. This represents a significant 39% increase compared to the previous year’s payment of $476 billion. The estimation considers the amount of debt the public holds and the prevailing interest rates, which have been influential factors.
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The considerable surge in interest costs is primarily attributed to the heightened interest rates. The Federal Reserve, in response to notable inflation, has implemented ten rate hikes since early 2022. These actions have contributed significantly to the rise in interest expenses.
As of now, the national debt of the US government exceeds $32.17 trillion. The country’s gross national debt is projected to reach nearly $52 trillion within the next ten years.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
