The $40 Trillion Debt and Why the Fed Ignores It

The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy · Aug 20, 2026 · 8m · transcript

The U.S. national debt just crossed $40 trillion, doubling in a decade. But the Federal Reserve, focused on inflation and employment, largely ignores it. In this episode, Lucas and Luna unpack why the debt doesn't directly drive Fed policy, how Treasury Secretary Bessent's comments on a peaking deficit fit into the picture, and what the Fed actually watches instead—like core PCE, job openings, and the ten-year Treasury. They use the latest data: real GDP growth at 1.5 percent, core PCE running at 2.3 percent, and the unemployment rate at 4.1 percent. They also explore the subtle…