The US debt is so massive that interest costs alone are now $3 billion a day

With US debt now at $35.3 trillion, the cost of paying interest on all that borrowing has risen recently and now averages $3 billion a day, according to Apollo chief economist Torsten Sløk.

And that includes Saturday and Sunday, he pointed out in a note on Tuesday.

Daily interest spending has doubled since 2020, rising from $2 trillion about two years ago. That’s when the Federal Reserve began its campaign of aggressive rate hikes to control inflation.

In the process, this made servicing the US debt more expensive as Treasury bonds paid higher yields. But with the Fed poised to start cutting interest rates later this month, the opposite may happen.

“If the Fed cuts interest rates by 1 percent and the entire yield curve goes down by 1 percent, then daily interest expense will drop from $3 billion per day to $2.5 billion per day,” Sløk estimated.

Meanwhile, the federal government closes its fiscal year at the end of this month, and the annual cost of paying interest on the U.S. debt was already $1 trillion as of months ago.

But even as the Fed’s rate cuts ease the burden of interest payments, the next president is expected to worsen budget deficits, adding to the overall debt pile and offsetting some of the benefits of lower rates.

In fact, a recent Penn Wharton budget model analysis found that the deficit will expand under either Donald Trump or Kamala Harris.

But there is a big difference between the two.

Under Trump’s tax and spending proposals, primary deficits would increase by $5.8 trillion over the next 10 years on a conventional basis and by $4.1 trillion on a dynamic basis, which includes the economic effects of fiscal policy.

Under a Harris administration, primary deficits would increase by $1.2 trillion over the next 10 years on a conventional basis and by $2 trillion on a dynamic basis.

However, JPMorgan analysts considered the outlook unsustainable regardless of who wins the presidential election, while acknowledging the prospect of higher deficits under Trump.

“Regardless of the outcome of the election, the post-pandemic trend has been foolish fiscal policy that soaks up substantial amounts of capital and spurs additional private investment,” the bank said. “At the same time, the mass retirement of baby boomers shifts a substantial portion of the population from a high-savings period of life to a low-savings period, depressing the supply of capital.”

This story was originally featured on Fortune.com