Bank of America estimates that Fed rate hikes could cost the US government an additional $50 billion annually in interest payments on Treasury bills. T-bills represent over 20% of total US debt and require constant refinancing, making federal finances highly sensitive to rate changes. BofA forecasts three 25-basis-point rate hikes by year-end, pushing the federal funds rate to 4.25%-4.50%. Federal net interest payments are projected to exceed $1 trillion in fiscal 2026, with the US national debt forecast to reach $38 trillion to $40 trillion.
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