Finance
Market Brief: One More Rate Hike, Just A Gesture
The market expects the Federal Reserve to begin raising interest rates again, though its capacity to do so is highly constrained by a federal debt
The market expects the Federal Reserve to begin raising interest rates again, though its capacity to do so is highly constrained by a federal debt of approximately $39 trillion and annual net interest payments exceeding $1 trillion (about 3.3% of GDP). While a single rate hike may occur as a gesture to demonstrate the independence of the newly appointed chair, Warsh, from a president favoring lower rates, such a move is not expected to bring down inflation.
By the numbers
- $39T
- Total United States federal debt
- $1T
- Annual net interest on US federal debt
- 3.3%
- Net interest on federal debt as share of GDP
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