Line chart showing marketable debt as percent of GDP and interest payments as percent of normalized receipts from January 1992 to December 2023. Debt as a percent of GDP was below 50% of GDP until rising in 2008 and reaching above 90% in 2020. Despite the rise in debt, interest payments had trended lower until they began increasing in 2022.
Sources: Bloomberg, U.S. Treasury Department, and Wells Fargo Investment Institute. Monthly data from January 1, 1992 to December 31, 2023. Normalized receipts are based on rolling 10-year moving average. GDP = gross domestic product.
Key Takeaways
- Interest payments by the federal government as a share of revenues are on the rise again, after trending lower since 2012 — the result of rapid debt expansion and of higher interest rates. The current interest payment burden has already reached a level associated in the past with pushback by investors and fiscal austerity measures from the government.
- Interest expenses are especially vulnerable to further increases due to more elevated interest rates and to the budget’s structural weaknesses keeping deficits (and associated borrowing needs) historically high.