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Fiscal: Heavy

How much the federal government is borrowing and what it pays to do so. Fiscal pressure is above its 20-year middle: heavy.

Score 0.86 on a −2 to +2 scale: the average of 3 indicators, each placed by where today sits in its last 20 years. Indicators where a higher number means less fiscal pressure are flipped.

Indicators

Connections

• Fed funds rateraisesAvg interest rate on federal debtData agrees

  As old debt rolls over, higher rates raise the government's interest bill. Typical lag: months-years. Strongest match 4 months later (correlation 0.88, 294 observations since 2002).

• Federal deficit (rolling 12 months)adds toTotal public debtData agrees

  Deficits are financed by borrowing. Typical lag: same month. Strongest match in the same period (correlation 0.56, 117 observations since 2017).

• Total public debtpressures10Y Treasury yieldData agrees

  More Treasury supply may push long rates up; size of the effect is disputed. Typical lag: years. Strongest match 24 months later (correlation 0.22, 347 observations since 1996).

• Federal spending by statesupportsstate unemploymentUntested

  Federal contracts and grants support local jobs. Typical lag: quarters. Planned for Phase 2.