Bank of America data shows that there are currently approximately $7 trillion in outstanding US Treasury bonds, the vast majority of which will mature within one year. Since short-term debt has a maximum maturity of only 52 weeks, its financing costs will be quickly repriced along with policy interest rates.
If the Federal Reserve raises interest rates by a cumulative 75 basis points this year, and this is fully transmitted to these short-term bonds, a simple static calculation would be: $7 trillion × 0.75% = $52.5 billion, equivalent to approximately 15-16 basis points of GDP. For reference, the CBO benchmark forecast has projected that US net interest expenses will be approximately $1 trillion in 2026, representing 3.3% of GDP, rising to 4.6% by 2036.
