A view shows a bronze seal next to a door at the U.S. Treasury Department in Washington, U.S., January 20, 2023.
Kevin Lamarque | Reuters
As the US Treasury Department announced on Thursday, the US government has spent more than one trillion dollars on interest payments on its $35.3 trillion national debt for the first time this year.
With the Federal Reserve's benchmark interest rates at their highest in 23 years, the government had to raise $1.049 trillion to service the debt, up 30 percent from the same period last year and part of the $1.158 trillion in payments planned for the full year.
After deducting the interest the government receives from its investments, net interest payments total $843 billion, higher than any other category except Social Security and Medicare.
The jump in debt-service costs came as the U.S. budget deficit soared in August, approaching $2 trillion for the full year.
With a month to go before the end of the fiscal year, the federal government's deficit had increased by $380 billion in August, a dramatic reversal from the $89 billion surplus in the same month last year, which was largely due to accounting maneuvers related to student loan forgiveness.
This would bring the deficit to nearly $1.9 trillion in 2024, an increase of 24% from the same time a year ago.
The Fed is widely expected to cut interest rates next week, but only by a quarter of a percentage point. However, in anticipation of further action in the coming months, US Treasury yields have fallen sharply in recent weeks.
The scale 10-year bond The yield recently stood at around 3.7%, more than three quarters of a percentage point below the level at the beginning of July.
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