Rising interest rates will crush the Federal Budget

The Federal Reserve’s policies of rate hikes and quantitative tightening — reducing its balance sheet by $8.9 trillion — will increase the volume and cost of borrowing by the federal government, shrinking the central bank. federal budget and the consequences of decades of deficit spending.

The impact will be felt even in the absence of a recession, but if the economy does, the government will have limited ability to spur the recovery with fiscal stimulus.

https://www.wsj.com/articles/high-interest-rates-will-crush-the-federal-budget-inflation-debt-spending-costs-recession-economy-11656535631 Rising interest rates will crush the Federal Budget

Mike Fahey

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