Eric Revell
3 min read
The Treasury Department will need to refinance nearly one-third of the more than $36 trillion in debt owed by the federal government, which serves as a backdrop to President Donald Trump's repeated calls for the Federal Reserve to cut interest rates.
A report by the Treasury's Office of Debt Management for the second quarter of fiscal year 2025 shows that as of April 30, 31.4% of the outstanding national debt will be due for refinancing within the next year.
That amounts to about $11 trillion in U.S. debt securities that will have to be refinanced over the course of the next 12 months.
The cost of servicing the more than $36 trillion national debt has escalated in recent years as interest rates rose to counter the most significant inflationary cycle the U.S. economy has faced in four decades.
Trump Slams 'Stupid' Fed Chair Jerome Powell Ahead Of Interest Rate Decision
In fiscal year 2024, interest costs incurred through servicing the national debt jumped by $239 billion, or 34%, to a total of $949 billion. That amount is larger than both the Department of Defense's discretionary budget and federal spending on Medicare.
The rising cost of servicing the national debt, along with spending growth in Social Security and Medicare due to the aging of America's population, are the main drivers of the widening federal budget deficit – which is projected to total about $1.9 trillion in fiscal year 2025.
Trump has repeatedly called for the Federal Reserve to cut its benchmark interest rates in an effort to stimulate economic growth and save the federal government money on servicing the debt.
Federal Reserve Leaves Key Interest Rate Unchanged For Fourth Straight Meeting
Trump has also attacked Fed Chair Jerome Powell, who he nominated to the role in 2017, as being "Mr. Too Late" and a "numbskull" for the central bank not cutting interest rates.
The Fed on Wednesday left its benchmark federal funds rate unchanged for the fourth consecutive meeting, which prompted the president to renew his attacks on Powell.
"'Too Late' Jerome Powell is costing our Country Hundreds of Billions of Dollars," Trump wrote on Truth Social. "He is truly one of the dumbest, and most destructive, people in Government, and the Fed Board is complicit. Europe has had 10 cuts, we have had none. We should be 2.5 Points lower, and save $BILLIONS on all of Biden's Short Term Debt. We have LOW inflation! TOO LATE's an American Disgrace!"
