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Concerns Grow on Wall Street Over Potential Regional Banking Crisis

Wall Street is worried about another regional banking crisis, with the commercial real estate market at the center of concerns. The pandemic and interest rate hikes have hurt property values, making regional banks, which hold most of the $2.7 trillion in commercial real estate loans, vulnerable. The recent loss reported by New York Community Bancorp has intensified these fears, causing its shares and the US Regional Bank index to fall. Read More.

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US National Debt Interest Costs to Surpass Defense Spending in 2024

The recent surge in interest rates is causing a significant increase in the U.S. government's borrowing costs for its $34.24 trillion national debt. Interest payments on this debt are the fastest-growing part of the federal budget and are projected to surpass both Medicare and defense spending in 2024. The Congressional Budget Office estimates that interest payments will triple from nearly $475 billion in fiscal year 2022 to $1.4 trillion in 2032 and reach $5.4 trillion by 2053.

Interest costs as a share of GDP are expected to hit a record 3.1% this year and rise to 3.9% by 2034. The increase in net interest payments is attributed to both higher interest rates and the growing amount of debt. The Federal Reserve's 11 rate hikes in 16 months have raised borrowing costs to levels not seen since the 2008 financial crisis.

The national debt exceeded $34 trillion in January, with President Biden's administration contributing approximately $4.8 trillion to this figure through various spending measures. Despite this, Biden has defended his administration's spending, claiming to have reduced the debt by $1.7 trillion in his first two years in office. Read Now.