The US Government 'Needs Lower Rates More Than Anyone' As Federal Interest Payments Touch $1.2 Trillion, Says Popular Commentator

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Aug 25

On Sunday, in a post on X, The Kobeissi Letter highlighted the mounting pressure of interest payments for the U.S. government, saying that the Federal Reserve may have to slash interest rates ...

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href=https://www.benzinga.com/markets/macro-economic-events/25/08/47300933/the-us-government-needs-lower-rates-more-than-anyone-as-federal-interest-payments-touch-1-2-trillion-says-popular-commentator><strong>Benzinga_recent_news</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>On Sunday, in a post on X, The Kobeissi Letter highlighted the mounting pressure of interest payments for the U.S. government, saying that the Federal Reserve may have to slash interest rates ...</p>\n\n<a href=\"https://www.benzinga.com/markets/macro-economic-events/25/08/47300933/the-us-government-needs-lower-rates-more-than-anyone-as-federal-interest-payments-touch-1-2-trillion-says-popular-commentator\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BPOP","symbol_name":"大众银行","start_time":0,"source_url":"https://www.benzinga.com/markets/macro-economic-events/25/08/47300933/the-us-government-needs-lower-rates-more-than-anyone-as-federal-interest-payments-touch-1-2-trillion-says-popular-commentator","article_id":"2562292738","we_media_id":null,"thumbnails":["https://cdn.benzinga.com/files/images/story/2025/08/25/The-Federal-Reserve--Fed--To-Cut-Interes.jpeg?optimize=medium&dpr=2&auto=webp&width=240"],"rights":{"source":"benzinga_recent_news","url":"https://www.benzinga.com/markets/macro-economic-events/25/08/47300933/the-us-government-needs-lower-rates-more-than-anyone-as-federal-interest-payments-touch-1-2-trillion-says-popular-commentator","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2562292738","pubTimestamp":1756094760,"columns":[],"sourceInfo":{"source_id":"benzinga_recent_news","name":"Benzinga"},"weMediaInfo":null,"summary":"On Sunday, in a post on X, The Kobeissi Letter highlighted the mounting pressure of interest payments for the U.S. government, saying that the Federal Reserve may have to slash interest rates substantially to prevent debt servicing from spiraling out of control.","collect":0,"end_time":0,"defaultTopTitle":"benzinga.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BPOP":"大众银行","BK4211":"区域性银行"},"translate_title":"热门评论员表示，随着联邦利息支付达到1.2万亿美元，美国政府“比任何人都更需要降低利率”","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BPOP":1},"content_text":"On Sunday, in a post on X, The Kobeissi Letter highlighted the mounting pressure of interest payments for the U.S. government, saying that the Federal Reserve may have to slash interest rates substantially to prevent debt servicing from spiraling out of control. \n“The US government needs lower rates more than anyone,” the post says, highlighting the fact that “US Treasury interest payments have reached a record $1.2 trillion over the last 12 months,” citing data from Bank of America’s Global Research team.\nIt says that the U.S. fiscal trajectory could worsen if this continues, adding that “annual interest expense would hit $1.4 trillion in 2026,” if interest rates stay the same, highlighting the growing strain of higher borrowing costs, if the Fed does not cut interest rates during its next meeting.\nSee Also: Peter Schiff Dismisses Trump Claim That Fed Rate Cut Will Help Homeowners, Says Maybe Jerome Powell Is ‘Helping Housing’\nThe post says that the only way to deal with this issue is for yields on government debt to fall significantly. “To keep interest costs stable, the average yield on US government debt, which has a maturity of 5-6 years, would need to drop below 3.1%,” it says.\nWith the 5-Year Treasury yield now at 3.8%, the post notes that it is now far from that target, adding that the Fed would need to cut rates by at least “75 basis points,” in order to “calm the fire.” \nIt concludes with a stark warning that the U.S. “deficit spending is out of control,” continually adding to the national debt and its interest expenses.\nLast week, Fed Chair Jerome Powell hinted at a rate cut in September, with his comments regarding the “shifting balance of risks” reigniting optimism in the markets and among observers. \nRecently, hedge fund manager Ray Dalio echoed similar concerns when highlighting the risks of rising interest payments on federal debt, saying that they could surge from $1 trillion to $2 trillion if the government does not rein in spending and address its deficits. \nDalio warned that this could lead to significant spending cutbacks, unprecedented tax increases, or extensive money printing and devaluation.\nPhoto Courtesy: Pla2na on Shutterstock.com\nRead 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