Trump's Rare Fed Visit Sparks Talks Of A $7 Trillion Problem

President Donald Trump showed up at the Federal Reserve on Thursday to tour its renovation - but the symbolism of the visit revealed something far more urgent: America's spiraling $7.1 trillion deficit and the rising risk it places on markets and monetary policy.

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Trump's appearance, just the fourth ever by a sitting U.S. president at the Fed, took a sharp turn when he publicly clashed with Chair Jerome Powell over the cost of the central bank's real estate overhaul.

But behind the construction spat lies a bigger concern: the cost of servicing the ballooning national debt, and the political pressure now building for lower interest rates.

$7 Trillion In Spending, $1 Trillion In Interest

According to Bank of America chief investment strategist Michael Hartnett, the scale of current U.S. government spending - $7.1 trillion annually - is so large that it translates to roughly $2.6 billion in outlays every three hours and 12 minutes.

That’s equal to the cost of the Federal Reserve’s renovation of its Washington, D.C. headquarters.

The fiscal strain is becoming untenable: interest payments alone are approaching $1 trillion a year. In this environment, Hartnett said Trump's team is likely to push for interest rates below 3% to stabilize borrowing costs.