The $32 Trillion Debt Refinancing Problem

We know the U.S. government is spending heavily, but many don’t understand how the national debt is financed. The primary method is through issuing Treasury bonds. Today, roughly $32 trillion of U.S. debt is outstanding in Treasuries, held by the Federal Reserve, U.S. investors, mutual funds, and foreign countries such as Japan and China. The bigger concern isn’t just the size of the debt, but the cost of servicing it. A large portion of Treasuries matures in 2026–2029, meaning the government will need to refinance significant amounts of debt. With interest rates still relatively high, replacing this debt could become increasingly expensive.

Source: U.S. Department of the Treasury 

This graph was produced by Lucas Juery, CFA, CFPⓇ and is not intended to provide financial advice.