8.5% Growth vs 3.4% Interest Rate: The Mathematics of America's Debt Spiral
2026-10-05 12:36:25
CoinMeta data: Recent figures show that the US debt spiral seems to be becoming increasingly urgent, with the yield on 10-year Treasury bonds breaking through 5%, and interest costs exceeding $1 trillion. However, a growth rate of 8.5% still exceeds the average debt interest rate of 3.4% before inflation. The Bureau of Economic Analysis estimates this 8.5% as the annualized growth rate for the second quarter. Nevertheless, the average interest rate of 3.4% partly reflects older bonds. TD Securities indicate that as bonds mature, costs will gradually rise. Although yields have reached their highest point in 24 years, the debt is not being refinanced all at once. TD Securities estimate the weighted average maturity of the debt to be about 5.9 years. Excluding short-term notes, the average coupon rate on bonds remains at 3.1%. TD predicts that interest costs for the fiscal year 2026 will be around $1.1 trillion; if yields remain the same, it is estimated to be $1.4 trillion in 2027 and $1.6 trillion in 2029. In addition, the Congressional Budget Office expects that by the fiscal year 2026, public debt will reach about 101% of the Gross Domestic Product (GDP).
Source:BeInCrypto
This content is for market information only and does not constitute investment advice.
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