There is currently a theory in the macroeconomic world that the US Federal Reserve will not cut interest rates until 2024.

The idea behind the theory is that the US economy is very strong and has continued to grow for the time being, while contributing to the US Federal Reserve’s “transition” (to the point of pausing and thinking about lowering interest rates). The strength of the US economy.

As a result, inflation has started a new upward trend. What If No Interest Rate Cuts Affect Bitcoin Price?

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A big problem for the US government?

On Twitter, noted macroeconomist Luke Groman even speculated that US interest rates are at 6 percent. That means we’ll get even more interest rate hikes instead of cuts.

On $35 billion in debt, it will eventually pay $2.1 trillion a year in interest.

If people think inflation and nominal GDP growth are strong now, see what happens if the Fed raises to 6%, a 6% yield curve on $35T of debt over time, ultimately resulting in $2.1T (8% of GDP) per year. Interest “stimims” (4-5% of GDP+ non-interest deficits.)🚀 https://t.co/Mi30QUhPrG

— Luke Gromen (@LukeGromen) March 1, 2024

According to Gromen, that would be 8 percent of US gross domestic product (GDP). That misery accounts for more than 4 to 5 percent of the budget deficit the U.S. government produces annually.

In other words, the US government’s budget deficits seem to be growing.