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Research Focus Podcast: The U.S. Budget Deficit, Interest Rates, and the Future


The Government Accountability Office has recently warned that the U.S. federal government faces an “unsustainable long-term fiscal future.” As interest rates rise, so does the cost of servicing the large national debt, and the government shows no signs of reducing its annual deficit to curb the issue. Arnerich Massena recently shared a chart showing the U.S. budget projections, including revenue, interest expense, and deficit, looking ahead to 2053, and the forecast is troubling. In this Research Focus podcast, Co-CEO and CIO Bryan Shipley, CFA, CAIA, and Senior Research Analyst Arthur Coyne, CFA, take a deeper dive, exploring the issues around growing deficits, rising interest rates, and inflation, and discussing the potential remedies and their impact on the investment environment.

In the discussion, they take a look at what it may mean that we have reached a place where the U.S. is spending about a trillion dollars annually on interest costs alone. As that figure rises, it cuts into the government’s ability to spend money for services and infrastructure. Backing out of this issue may require some hard choices, and Bryan and Arthur examine what that could mean and the different ways it might play out. Though they may not have all the answers, we think this is a meaningful and relevant subject and are pleased to bring our audience in to some of our thought process. Watch the podcast above, or on YouTube here or listen on Soundcloud here.