FILE - President Joe Biden arrives at the White House, in Washington, from his Asian trip, Tuesday, May 24, 2022. The Congressional Budget Office released an economic outlook Wednesday saying that high inflation will persist into next year, likely causing the federal government to pay higher interest rates on its debt. WASHINGTON —
The Federal Reserve has been trying to reduce inflation by raising its benchmark interest rates, causing the interest charged on 10-year U.S. Treasury notes to increase substantially in recent months. One consequence is that the government will be spending more money this year to service its debt. By 2032, the yearly interest payments will nearly be $1.2 trillion, or more than what the federal government spends on defense.
“The American Rescue Plan has fostered an extraordinarily fast recovery and leaves us in a strong position to address the global challenges posed from supply chains and the economic fallout from Russia’s invasion of Ukraine,” he tweeted. The report says beyond 2032, “if current laws remained generally unchanged, deficits would continue to grow relative to the size of the economy over the following 20 years, keeping debt measured as a percentage of GDP on an upward trajectory throughout that period.”
“Stabilizing our debt will help build a foundation for broad-based economic growth and make us better prepared for the challenges and opportunities of the future,” he said.
Are you excited about the inflation that you voted for?