LynAlden on Nostr: As an update to this post from last month, Q1 2025 had less interest expense than Q4 ...

As an update to this post from last month, Q1 2025 had less interest expense than Q4 2024.

Treasury notes and bills of about 2 years or less are reinvesting with lower interest rates, while Treasury notes and bonds of 3+ years are reinvesting with higher rates.

Interest expense is going to remain elevated as long as interest rates remain elevated, but the "Treasury has to roll $9 trillion in debt this year" narrative was so overdone.

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nevent1q…07g3

A lot of people, including some really well known ones, cite the figure that the U.S. has to roll $9 trillion in debt over the next 12 months, as though it’s a disaster.

Sometimes they assume the average interest rate is spread over the full Treasury debt duration evenly, including from years ago.

But in reality, most of what is maturing is short-term debt, which will have similar interest rates as it had over the past couple years, and mostly the same holders will refinance it. Only a minority is longer-term debt, meaning lower-rate bonds will mature and get refinanced by higher-rate bonds. Not a giant deal.

I’m first in line to talk about debts, deficits, and interest expense becoming a problem. I even have probably the best-known single meme about it. So, zooming out, yes it’s a major deal.

But most of the time when people cite the gross refinancing numbers over the next 12 months, it’s a flag that they’re unfamiliar with the subject, and getting caught up in alarmism.