Why the Fed Ignores the Record $40 Trillion Debt

The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy · Aug 21, 2026 · 7m · transcript

The U.S. government debt has just passed $40 trillion, more than doubling in a decade. As Treasury Secretary Bessent declares the deficit has peaked, the Fed under Chair Warsh keeps rates on hold, watching inflation and jobs data instead of the debt pile. In this episode, Lucas and Luna unpack the economic logic behind the Fed's apparent indifference: why the central bank's mandate doesn't include debt sustainability, how the Treasury market signals stress (10-year yield at 4.74%), and what happens when the Fed's balance sheet and the Treasury's borrowing needs…