MNI POLICY: U.S. Treasury Says Net Interest Costs Down 10% YoY

Net interest costs on U.S government debt are down 10% from 2019 to 2020 despite record spending, data released Friday by the Treasury Department showed, suggesting the government has room to continue to borrow to support the economy.

The U.S. government after 11 months in the fiscal year had a USD3 trillion deficit, with outlays of USD6.05 trillion and receipts of USD3.05. Total debt by the public has risen to USD20.8 trillion as of Wednesday, from USD17.4 trillion in March.

But the cost of servicing the nation's growing debt load shrank USD53 billion through the first 11 months of the fiscal year compared to year-ago levels, the Treasury Department said.

"That's despite a significant increase in the level of debt outstanding," a senior Treasury official said on a call with reporters.

"That stems from the fact that while the debt has increased by USD4.3 trillion year-over-year through the end of August there has been an 80 basis point decrease on the weighted average yield on outstanding debt as of the end of August," the official said. "A second component is a decrease in the interest paid on TIPS securities as a result of lower inflation."