Boring But Important: National Debt Will Swell When Interest Rates Rise

Fed rate hikes could swell the debt. "In the latest economic projections by individual Fed policymakers, the median expectation for short-term interest rates at the end of 2017 is 3.75 percent. Compare that to the CBO's estimate from August of 2.5 percent. For 2016, the Fed is at nearly 3 percent while the CBO is at 1.5 percent. For 2015, the Fed is just under 1.5 percent while the CBO is at 0.6 percent. If CBO based its estimates on interest rate projections that prove to be too low, the effect on the budget outlook could be severe. More interest means more debt, which means more interest." Anthony Mirhaydari in The Fiscal Times