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The massive increase in government debt is becoming an increasingly acute problem for the US, because: Interest payments on US debt alone are expected to reach a record high of around $1.3 trillion in 2025 – significantly more than the entire US military budget!
Interest costs for the US government have exploded in the last four years in particular – they have almost doubled in this short period of time!
The main cause and driver is an irresponsible debt policy, which has been characterized by out-of-control budget deficits for years. However, the relatively high interest rates in the US (around 4%) are significantly exacerbating this dynamic!
The result: the US's strategic room for maneuver is massively restricted – a problem that Donald Trump wants to solve primarily with cheap money. This is one of the reasons why Trump has been calling for greater influence over the US Federal Reserve (Fed) for some time. His goal: to lower interest rates “by decree” and thus reduce the enormous interest costs.
Important: In May 2026, the position of Fed chair will become vacant—a perfect opportunity for Trump to bring the US central bank under his control as well.
However, he is likely to appoint the new Fed chair before the end of this year (as already announced) in order to influence interest rate expectations in his favor as early as possible.
The days of a relatively independent US central bank could soon be numbered – with significant consequences and potential risks for the global financial system!
