That red line you see is US government debt, which punched through $36 TRILLION in Q4 2024. The blue line is Nominal GDP at $29.7 TRILLION. Translation: Debt now equates to 122% of US GDP.
Three take-away:
Interest payments on US national debt has now exceeded $1 trillion (that higher than spending on US defence or Medicare)
Investors are demanding hazard pay: 30-year Treasury yields burst above 5% as the term premium re-awakens.
The US Treasury halo is dimming: All three major rating agencies have removed the coveted AAA rating. Washington’s borrowing spree now costs roughly $108k per citizen.
Why this chart matters
CFOs and Corporate Treasurers may need to re-price long-term funding – the risk-free rate isn’t so risk-free anymore.
Investors: Duration pain isn’t just a 2022 story; watch the belly of the curve.
Policy-wonks: Every 1% rate shock adds ~$360 BILLION to annual interest, which is more than the entire USDA budget.
Bottom line: The debt line used to shadow GDP. Now it’s sprinting ahead of it.
Is this the fiscal wake-up call, or just macro noise?
Let me know in the comments.
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