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US Treasury Secretary Yellen warnsmw2crashps5Long-term high interest rates will make it more difficult to control U.S. debt, highlighting the importance of increasing fiscal revenue in budget negotiations. She emphasized that inflation-adjusted interest payments should not exceed 2% of GDP.
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U.S. Treasury Secretary Yellen warns: U.S. debt management faces challenges in a high interest rate environment
U.S. Treasury Secretary Yellen recently pointed out that the long-term environment of maintaining higher interest rates has made it more difficult for the United States to control its borrowing needs, which highlights the urgency of increasing fiscal revenue during budget negotiations. Yellen emphasized,"We have raised interest rate expectations, which has a substantial impact on fiscal management and makes maintaining deficits and interest spending within control more challenging conditions." She singled out that the ratio of inflation-adjusted interest payments to GDP, a key indicator, has increased over the past year, but the White House predicts it will stabilize at 1 per cent over the next decade.mw2crashps5.3%. "Although there are no hard and fast rules, I personally don't want to see this ratio exceed 2%," Yellen said. This is her clearest statement on this indicator so far.