Interest rates on US Federal Government debt are on the cusp of exceeding the growth rate of (nominal) US GDP – an unusual situation, and one which challenges what has been the ‘conventional wisdom’ in economic policy-making circles for at least the past six years that government deficits and debt may not matter as much as economists previously thought they did.

And on top of that, the Trump regime, with the aid of the Republican majorities in both Houses of Congress, are about to consciously and deliberately add significantly to the (already large) budget deficits and public debt in prospect over the next decade and beyond.

The US and global bond and currency markets could be approaching a critical moment.

2025-05-24 US finances when 'r' is greater than 'g'