2026-01-20 01:30:10

Another milestone in U.S. Treasury interest expenses has arrived.

The data for Q3 2025 is staggering: U.S. interest payments reach $98.1 billion, annualized to $1.2 trillion. This figure has already surpassed the entire 2026 defense budget of $900 billion. From another perspective, the federal resources now consumed by debt costs exceed those allocated to the military. This is not just a numbers game but a structural inflection point.

The Real Dilemma

In Q1 2026, monthly interest payments will be $17.9 billion, a 13% increase compared to the same period last year. What proportion of federal revenue is allocated to bondholders? Currently 19%, and it will soar to 22% by 2035. The most painful part is this ratio: for every $5 the federal government collects, $1 goes directly to creditors, leaving little room for defense, healthcare, and social security.

Treasury Auctions Ease

Demand for 10-year Treasury auctions is softening. In August, the yield on the 2025 maturity decreased by 1.1 basis points, and subscription multiples are declining. Primary and secondary dealers are forced to absorb more supply because genuine buyers are retreating. This is a warning sign of demand exhaustion.

Imminent Refinancing Pressure

A large amount of debt will mature within the next 24 months. The average interest rate on transferable debt is now 3.36%, up from 1.55% five years ago. Daily issuance of Treasury debt is increasing by $61.7 billion. The U.S. Treasury is now caught in a dilemma: either accept higher yields (which will increase the deficit) or seek Federal Reserve intervention (risking devaluation).

Market Signals

The 30-year Japanese government bond yield has soared, and arbitrage trades are beginning to close. Gold prices are at $4,596 per ounce, and silver at $90 per ounce. Major foreign buyers continue to withdraw. The truth behind rising commodity prices is not inflation panic but a decline in confidence in currencies. Bond markets often send early warnings.

The signal is clear: interest expenses surpass defense spending, and most people have yet to realize its implications.

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SleepyArbCat

· 2h ago

Japanese arbitrage closing positions, gold soaring... Here it comes again and again. The traditional financial system is struggling. Wake up, wake up, wake up.

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TopBuyerForever

· 2h ago

Whoa, interest expenses have exceeded the defense budget? Is the US about to be finished? --- For every 5 dollars, 1 dollar goes into the debt holder's pocket. This is the real black hole of finance. --- Demand for government bond auctions is softening, foreign capital is fleeing, and this signal couldn't be more obvious. --- Gold and silver taking off isn't due to inflation; it's because confidence in the dollar has collapsed. Do you understand? --- I just want to know, what else can the Federal Reserve do if this continues? Is there any other way besides continuing to pump liquidity? --- Interest costs are skyrocketing, and the deficit will only grow larger. This is a dead cycle. --- The bond market is going crazy first, followed closely by other assets. I've already gone all-in on precious metals. --- It's incredible. Demand for government bond auctions is declining, with primary and secondary traders taking over... the situation is getting a bit unsustainable. --- In the next 24 months, a large amount of debt will mature, and yields will have to go higher. The Treasury really has no way out.

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ProofOfNothing

· 2h ago

Interest expenses eat up the defense budget—does anyone really care? --- 179 billion per month in interest, doubling in five years, just forget it --- Creditors are bleeding us dry, while we're still watching stock fluctuations—laughable --- Nobody wants to buy government bonds at auction anymore—that's the real signal --- Making 1 dollar on 5-dollar income and giving 1 dollar to creditors—what kind of logic is this... --- Japan is closing out arbitrage positions, gold prices are soaring, and all indicators are flashing red --- Commodity prices are rising not because of inflation, but because no one trusts the dollar anymore, understand? --- No one has ever told me this—everyone's talking about rate cuts and hikes, no one cares that interest expenses have already exceeded defense spending --- The Ministry of Finance is now being grilled over the fire—rate hikes cause deficits to explode, rate cuts lead to dollar depreciation, no matter what, it's a death sentence --- Foreign capital is fleeing, traders are eating up the market—everyone with a clear eye can see it

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