Last fiscal year, the interest expense on U.S. debt was $950 billion, up 35% from the prior due mostly to higher rates.

Looking ahead, the Fed expects to make further rate cuts— possibly another 0.50% in 2024 and 1.0% more in 2025. Additionally, the Federal Reserve now expects the unemployment rate to rise to 4.4% in 2024, and inflation to come down to 2.3%.

Mortgage rates dropped before the Fed’s last meeting, and have risen more than 50 basis points since. If you’re wondering why, you’ll need to look at the 10-year Treasury bond yield.