The federal government’s borrowing has reached a sustained clip that now costs taxpayers $24 billion each week in interest payments alone, a figure derived from the average interest rate on the national debt. That weekly cost reflects the burden of servicing a total debt load that has surpassed $34 trillion, as the U.S. Treasury continues to borrow $155 billion every month of the current fiscal year.
The borrowing is conducted through the sale of Treasury securities — bills, notes, and bonds — which investors purchase. However, the expense of that borrowing has risen markedly since the Federal Reserve began raising interest rates in March 2022, eventually lifting the federal funds rate to a range of 5.25 percent to 5.50 percent by July 2023. Those rate increases have directly pushed up the yields the Treasury must offer to attract buyers for new debt.
Monthly Borrowing and the Rising Interest Bill
The Treasury has borrowed $155 billion each month since the fiscal year began on October 1, 2023. This sustained pace is occurring under a suspended debt ceiling; Congress voted in June 2023 to suspend the limit through January 1, 2025, granting the Treasury unlimited authority to borrow until that date.
The Congressional Budget Office, in its February 2024 report, projected that net interest costs for fiscal year 2024 would reach $870 billion. That figure would surpass spending on Medicare. The $24 billion weekly interest payment is not a temporary spike, according to the data; it is built into the system as long as the debt remains at these levels and interest rates stay elevated.
The average interest rate on the outstanding debt has climbed in lockstep with the higher yields on new Treasury securities. The CBO’s projection of $870 billion in net interest costs for fiscal year 2024 will only grow if the borrowing continues at this clip and rates do not fall.
Drivers of the Growing Debt Service Costs
The Federal Reserve’s rate hikes, initiated in March 2022, have been the primary driver of the rising cost of federal borrowing. The federal funds rate, now in the 5.25 percent to 5.50 percent range, serves as the benchmark for short-term borrowing. These increases directly raised the yields the Treasury must offer on new securities, which in turn pushed up the average interest rate on the entire stock of outstanding debt.
The Treasury Department, led by Secretary Janet Yellen, manages this borrowing. The debt ceiling suspension, enacted in June 2023, runs until January 1, 2025, giving the Treasury broad latitude to issue new securities to fund government operations when tax revenue is insufficient.
The Bureau of the Fiscal Service handles the actual management of this debt on behalf of the government, overseeing the sale of Treasury securities through auctions to investors.
Historical Context and Budgetary Implications
The U.S. Treasury is the federal department responsible for managing the nation’s finances, a role established by Congress in 1789 to handle government revenue. Alexander Hamilton served as the first secretary under President George Washington. The agency’s origins trace back to early efforts by the Continental Congress to fund the American Revolution through paper bills of credit.
Today, the department oversees the Internal Revenue Service, manages government debt, and supervises banking institutions. The Treasury uses various debt instruments to fund government spending when tax revenue falls short, and these securities are sold through auctions.
The cost of this borrowing directly affects the federal budget: when the government spends a large share of its revenue on interest payments, it limits the funds available for other public programs. This creates a direct link between global interest rates and the amount of money the government can spend on services.
The current trajectory — with $155 billion in monthly borrowing, a weekly interest bill of $24 billion, and a projected $870 billion in net interest costs for the fiscal year — underscores the mounting pressure on federal finances as the debt ceiling suspension remains in effect through the start of 2025.
