Why Kevin Warsh Inherits a Different Debt Problem Than Yellen Did

Lucas and Luna unpack the fiscal landscape Kevin Warsh inherits as the new Fed chair, focusing on a specific tension that previous episodes haven't covered: the way a shrinking deficit — the deficit actually shrank to $1.77 trillion in fiscal 2025 — combines with rising debt service costs to create a policy paradox. They anchor on the 10-year yield's recent drop to 4.43 percent, the 2-year sitting at 4.05, and the 30-year at 4.93, and ask: Is Warsh's first challenge really inflation, or is it the market's growing doubt about the Treasury's ability to roll over $38.5 trillion in debt without a crisis? They walk through the arithmetic of interest payments now consuming roughly 13 percent of federal revenue, the flattening yield curve, and why a smaller deficit doesn't mean we're out of the woods. No hot takes — just the numbers and what they imply for borrowing costs, fiscal space, and the next recession. #KevinWarsh #FederalReserve #NationalDebt #TreasuryYields #FiscalPolicy #Deficit #DebtService #YieldCurve #Economics #FedChair #BondMarket #InterestRates #FiscalOutlook #PublicDebt #MonetaryPolicy #FexingoBusiness #BusinessPodcast #TheNationalDebtPodcast Keep every episode free: buymeacoffee.com/fexingo