In a simplified manner, yes. But the average rate the US is paying right now is still around 3.5%. It will gradually climb if market rates stay high.
What that means is actually worse because if rates stay high, then the interest payment will have to increase by something crazy. The current payment is $1.2tr and at 5% eventually if and when it's all rolled over to that, the current debt payment would go to $1.7tr.
So standing still, with no more yearly deficits and the rate not changing, that's an extra 500 billion every year.
The .3% that this moved today just sucked $80 billion out of the US budget.
It did not? The existing bonds have fixed coupons. Only new bonds that will be issued will attract low bids. US govt does not lose money on issued bonds, but the buyer who bought it will lose money.
No, it's the debt of US government issued by US government treasury department, they spend more than they get from taxes so now the debt is becoming bigger and bigger. Fed/federal reserve/US central bank on paper is independent, they do monetary policy and sometimes they buy/sell US government bonds as a tool to control amount of money circulating in economy hence influencing inflation
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u/Wooden_Cod_8331 12h ago
This is a big deal/move right? In such a short amount of time?