A new Congressional Budget Office report forecasts that interest expenses on the national debt will grow from $231 billion this year to $799 billion by 2024.The $799 billion estimate represents 3 percent of gross domestic product, the highest ratio to be recorded in 18 years, CBO said Wednesday.
CBO also estimates the average rate of interest on U.S. debt will more than double to 3.9 percent over the next 10 years.
Federal funds rate is projected to remain close to zero through the second half of 2015 and then increase considerably in the succeeding years, according to the agency.
The report noted that 10-year Treasury yield is currently at 2.4 percent, and CBO expects that rate to climb over time due to factors such as investor expectations of a strengthening economy and short-term interest rate increases.
