The U.S. national debt is on track to reach $36 trillion in the near future. The federal government plans to borrow $1.369 trillion over the next six months, according to the U.S. Department of Treasury. This borrowing is part of the Treasury’s Marketable Borrowing Estimates, with expectations to borrow $546 billion from October to December. Despite lower projections for this period, the borrowing in the previous quarter was higher than expected at $762 billion. The Treasury plans to borrow $823 billion in the January to March quarter, anticipating another increase in debt. The government’s latest projections were released ahead of its quarterly refunding announcement on Oct. 30, outlining plans for long-term debt issuance.
In recent years, the U.S. government has issued trillions in short-term debt securities to manage budget deficits and interest payments. The federal shortfall for fiscal year 2024 was $1.83 trillion, the third-highest on record. Treasury Secretary Janet Yellen has stated that the government is not timing financial markets, but private estimates suggest that Treasury bills will make up a significant portion of net Treasury issuance. Foreign investors have dominated recent auctions due to lackluster domestic demand.
The Treasury market has seen fluctuations in recent months, with the benchmark 10-year yield rising significantly. Despite expectations for lower yields following interest rate cuts, Treasury yields have surged. The Federal Reserve announced a 50-basis-point interest rate cut in September, with more cuts expected in the near future.
The national debt has surpassed $35.8 trillion as of Oct. 24, and is expected to hit $36 trillion soon. Higher interest payments have contributed to the growing public debt levels, with net interest charges consuming a fifth of revenues last fiscal year. The International Monetary Fund (IMF) predicts that U.S. debt and deficit levels are unlikely to stabilize by 2029, with public debt reaching 134 percent of GDP under current policies. Despite this outlook, neither presidential candidate in the recent election has presented a plan to address the national debt. Malek stated in a note seen by The Epoch Times that the expenditures will be covered by increased borrowing.
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