Marketplace · Friday, September 25, 2026
A new report from the Congressional Budget Office suggests that if interest rates remain just 1 percentage point above expectations, the US government's interest payments could significantly increase, potentially ballooning the national debt. This scenario could also drag down economic growth, making it harder for private companies to secure loans and reducing federal tax revenue.
“It doesn't have to rise by much to really balloon the interest payments that we are making on this debt.”
“says that's because the higher rate the federal government was paying would make it harder for private companies to compete with it for loans to expand.”
“Both because the government is paying higher interest rates on its existing debt and because more government borrowing shrinks the economy and increases the deficit sort of indirectly.”