The Federal Reserve's Quagmire

Crossville TN

Description

The Committee for a Responsible Federal Budget, a nonprofit that advocates for federal deficit reduction, estimated that another 75-basis-point rate increase on Wednesday will add about $2.1 trillion to the national debt, which is already hovering near $31 trillion, over the next decade. "While raising rates is needed to help fight inflation, each Fed rate hike means much higher interest payments on government debt," the CRFB said in a statement to FOX Business. "Policymakers can help the Fed by limiting the need for rate hikes with fiscal policy that pushes inflation in the right direction. That means not enacting legislation and executive orders like student loan forgiveness that have ballooned deficits and only made demand pressures worse." That is because as interest rates rise, so too will the federal government's borrowing costs on its $30.89 trillion in debt.