According to OECD estimates, due to the Fed’s continued high rates, US debt service costs will reach 4.6% of GDP ($1.3-1.6 trillion), which is almost double last year’s figure and the highest level among developed countries. The next positions are occupied by Greece (2.5%), Iceland (2.2%), Spain and Portugal (2.0% each).
It is noteworthy that these expenditures are growing faster than defense spending ($918 billion vs. $916 billion, respectively).
It is worth noting that the increase in spending is largely driven by short-term bonds and bills. A faster reduction in the interest rate could not only reduce the burden on the US budget, but also improve the situation of the population, since the financial decisions of the country and large businesses ultimately affect ordinary consumers.
It turns out that because inflation has not fully slowed down, it is not desirable to lower interest rates, while on the other hand the economy already needs low interest rates.
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