How a Flat Yield Curve Strains the National Debt Arithmetic

The yield curve is flattening again, and this time it has implications for how the Treasury manages its record $38.5 trillion debt portfolio. Lucas and Luna walk through the mechanics of a flattening curve when the Fed is at a pause, and why the 2-year/10-year spread of just 38 basis points forces the government to borrow more at the short end, raising refinancing risk. They drill into the latest debt-to-GDP ratio of 122.6 percent and what happens when interest costs consume an ever-larger share of federal revenue. Featuring a concrete example from recent Treasury auctions and a look at how the Congressional Budget Office's baseline assumptions may be too optimistic. #YieldCurve #NationalDebt #Treasury #FederalReserve #DebtToGDP #FiscalPolicy #BondMarket #Economics #InterestRates #ShortTermBorrowing #RefinancingRisk #CBO #FederalDeficit #DebtService #FexingoBusiness #BusinessPodcast #Podcast #Finance Keep every episode free: buymeacoffee.com/fexingo