By: Ronald J. Ryan, CEO, Ryan ALM Inc.

The USA is the largest debtor nation in the world with $23.7 trillion outstanding in US Treasury marketable securities. Such debt comes in the form of routine Treasury auctions of Bills, Notes, Bonds, TIPS, and FRN (floating rate notes). The average maturity of such debt is basically unchanged for the last 22 years at an average maturity = 68 months. When interest rates went to historic low levels in 2019 – 2021, a prudent debtor would have refinanced at these very low rates and lengthened maturity significantly. But the US Treasury is very mechanical and for the most part, engages in refundings of expiring debt. A corporate Treasurer would have issued very long bonds of 50 to even 100 years. Although the average interest rate of our debt is low at 2.24%, we have 23.2% of our debt maturing in one year. We issued $15.5 trillion in auction issues in the last 12 months. Every 100 basis points in higher rates equates to an extra $155 billion in extra interest expense.