US Interest Costs Soar to $1.2 Trillion – Now Exceed Defense Spending
Over the last 12 months, US interest payments hit a record $1.2 trillion, surpassing defense spending ($900 billion) and now ranking as the second-largest government expense after Social Security. With trillions in debt maturing this year, the US government will have to refinance. If rates remain stable, total interest payments could skyrocket to $1.5 trillion by year-end. Even in a scenario where the Fed cuts rates by 100 bps (from 4.5% to 3.5%), interest costs are still projected to reach ~$1.3 trillion by the end of 2025. source : BofA
The US economy has been driven by a massive DEBT BUBBLE: In 2024, to generate 1 unit of GDP growth it took $3.8 of national debt...
In Q4 alone, it took $5.8 of debt to create $1 of economic growth. If not for the huge debt, the US economy would have been in a recession. Source: Global Markets Investor
‼️US economy policy uncertainty is SPIKING:
This means economic environment will be challenging to predict and may impact investments and spending, as well as trigger more volatility in the markets. The index is only below the 2018 levels when the previous trade war took place. Source: Global Markets Investor
Cut cut cut...
ECB’s Wage Tracker Points to Steep Slowdown This Year - Bloomberg Source: Bloomberg
Job Openings Unexpectedly Crater By More Than 500K In December
Source: zerohedge
Believe it or not, but the us has one one of the lowest tariff rates in the developed world... See chart below courtesy of DB.
NB: Most favored nations (MFN) Weighted mean tariff is the average of most favored nation rates weighted by the product import shares corresponding to each partner country.
Are tariffs inflationary? us 5-year breakeven rate just surged to its highest level in nearly 2 years.
Source: Tavi Costa, Bloomberg
The price of eggs in the U.S. is at an all time high and continues to climb.
Due to the ongoing bird flu outbreak and inflation, egg prices sat at $4.15 in December, that was up from $3.65 in November. The unusually high prices come after the outbreak...
