The US national debt has been growing exponentially over the past few decades. From just 1 trillion in 1981, to 22 trillion in 2020, all the way to 38.4 trillion today.
Instead of paying off their debt like us regular folk have to do, the US government continues to borrow more every year (deficit spending) in order to fund things like national defense, social programs, and interest payments.
In today's post, we'll discuss how this 38.4 trillion dollars of debt was issued, when it will need to be paid back, and what impact the US Treasury's recent shift to short-term debt will have if the Federal Reserve needs to fight another bout of inflation.
Debt Durations
The US government (the Treasury) sells debt on a weekly/monthly basis in varying durations:
- Treasury Bills - Less than 1 year.
- Treasury Notes - Greater than 1 year, but less than 10 years.
- Treasury Bonds - 20 or 30 years.
Interest Rates
Regardless of the time-frame, the government has to pay back all issued debt at interest, and the interest rate is typically fixed until maturity for nearly all treasuries.
So while the Fed can cut or raise today's interest rate, the government's interest payments won't be affected until the existing debt starts to mature and needs to be "rolled over" (refinanced) at the new rate.
The short-term debt (T-Bills) will be rolled over first, within weeks or months. Longer-term debt (like T-Notes and T-Bonds) will take years or decades before being rolled over and eventually impacting interest costs.
Shift To Short-Term Debt
In 2019 (before Covid stimulus), less than 55% of US debt was being issued as short-term T-Bills. As a result, when the Fed raised rates to fight inflation in 2022-2023, a smaller portion of the national debt had to be rolled over at the higher rates.
Fast-forward to 2025, and nearly 70% of gross issuance has been in T-Bills.
Therefore, if the Fed were to raise rates again to fight another bout of inflation (as a result of a return to "Not QE" perhaps), the cost of financing the national debt would surge even faster than last time.
You can see why Trump is so adamant about getting interest rates down!
Until next time...
Given the ballooning debt, and the US Treasury's shift to the short-end of the curve, the next wave of inflation could be damn near impossible to stop.
If you want to avoid this potential out-of-control inflation, be sure to own rare assets such as gold, silver, and Bitcoin. As well, you may want to consider owning digital assets that could be the foundation of future economic activity.
If you learned something new from this article, be sure to check out my other posts on crypto and finance here on the Hive blockchain. You can also follow me on InLeo for more frequent updates.
Sources
The Kobeissi Letter X Post [1]
Further Reading
Who Does The World Owe $315 Trillion Dollars To?
Lower Interest Rates And "Not QE" To Boost Asset Prices In 2026
Posted Using INLEO
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