Get started
Federal government current expenditures: Interest paymentsFederal government current expenditures: Interest paymentsFederal government current expenditures: Interest payments

Federal government current expenditures: Interest payments

No trades
See on Supercharts
Overview
Ideas
Discussions

A091RC1Q027SBEA trade ideas

The Fed cannot raise the FEDFUNDS rate enoughA higher FEDFUNDS rate (currently around 0%) causes higher rates on treasury yields. Here is our "effective rate" (ER) we pay on the national debt. Currently around 1.9% and 22% of tax receipts go to paying this interest. If ER goes above around 3%, interest payments are around 26% of US federal revenue. If ER goes above around 5%, interest payments are around 43% of US federal revenue. Inflation is at 7.5%, it is impossible to bring the FEDFUNDS to 7.5% (which would amount to 63% revenue). Good luck, FED.
FRED:A091RC1Q027SBEA
by rrmhearts
4
Percent of Revenue for Interest Payments vs FEDFUNDs DifferenceThis chart shows the difference between the percent of federal tax receipts used to pay interest on the national debt (currently around 20% of tax receipts) and the FEDFUNDS rate. This difference has been growing through the years as the debt grows larger and people are less willing to buy treasuries at low interest rates. Even with historically low interest rates in the present day, the debt burden is large enough to over come this. The effect of the FEDFUNDS rate on government expenditure will continue to grow with time. Even at an effective rate of 0%, the interest payments on the debt continues to grow. There is a clear upward trend on payments despite a near 0% FEDFUNDS rate. Increasing the FEDFUNDS rate will be detrimental to US government solvency. Inflation or default seem to be the two options available. Good luck, Fed people.
FRED:A091RC1Q027SBEA
by rrmhearts
1
Percent of Revenue for Interest Payments vs FEDFUNDs RatioThis chart attempts to show the ratio between the percent of federal tax receipts used to pay interest on the national debt (currently around 20% of tax receipts) and the FEDFUNDS rate. This ratio has been growing through the years as the debt grows larger and people are less willing to buy treasuries at low interest rates. Even with historically low interest rates in the present day, the debt burden is large enough to over come this. The effect of the FEDFUNDS rate on government expenditure will continue to grow with time. If inflation keeps up and rates are raised we could see even more than 50% of tax receipts going to pay the interest on the national debt. The ratio increases with time, which means that the effect of FEDFUNDS will have more impact on government interest payments. Another way to see this impact is through looking at FRED:A091RC1Q027SBEA/FRED:W006RC1Q027SBEA-FRED:FEDFUNDS/100
FRED:A091RC1Q027SBEA
by rrmhearts
Interest Expense gets relief on Fiscal Policy PullbackA serious matter, as interest Expense is not about to absolve itself. Amortized discount or premium on UST Bills, Notes, and Bonds is also included within the monthly interest expense. The Fiscal Year represents the total interest expense on the Debt Outstanding for a given fiscal year. ____________________________________________________________________ No furhterrStimmy for jimmy is wreaking havoc on Fiscal Policies that dissolved from $3.4 Trillion to abject Failure. See, all is well... Punchbowl removal will be a butter Pill for the Buy the Dip Herd. Herds are dangerous. 2021 - $562,388,232,682.17 2020 - $522,767,299,265.34 2019 - $574,587,783,463.63 Over the past 10 years, the federal government’s net interest costs have grown by 24.93% percent relative to the size of the economy as represented by GDP. Historically low interest rates hold down that growth, compared with growth in debt held by the public. Over the same period, that debt has increased by nearly 65 percent relative to GDP. _______________________________________________________________________ I refer to this as the QE 1 / 2/ 3 - Cluster.F_ck. Rest assured the Bond Bagholders will eventually realize their best hopes lie in buying Equites to keep pace with Inflation. Capital Stock rotation.
FRED:A091RC1Q027SBEA
by HK_L61
1