The US’ $7T Ticking Time Bomb

18, Apr 2025

The US’ $7T Ticking Time Bomb

THE US’ $7 TRILLION PROBLEM 

US get one big wahala…

Dem gatz pay off $7 TRILLION debt for the next 6 months. The problem be say, US no get spare seven trillion to just drop (dem don already spend the money).

So wetin dem go do? Dem go refinance (meaning: dem go carry new loan to pay the old one).

But wahala dey… When dem carry the first $7T loan for COVID time, interest rate na zero but now rates don dey above 4%.

E mean say US government gatz bring rates down sharp-sharp (if not, the debt repayment go turn wahala for future).

The main issue? US economy too strong. Strong dollar and strong economy no go allow dem cut rates especially if inflation dey rise.

So how dem fit drop rates fast? E get one old method dem go make everybody believe say the economy wan crash.

(If people believe say US no go grow again, dem go pull money comot from economy, the dollar go weak, and rates go fall.)

One way wey dem fit run this growth scare na to:

Make Trump announce tariffs wey go slow trade

Make Elon Musk sack thousands of government workers

Get one public gbas gbos with Zelensky (Ukraine president) to make people fear say global wahala go increase

If na Trump plan be this, e be like say e don dey work small-small.

See some charts wey dey show how strong US economy dey (remember: if economy weak, rates go drop).

1/ The 10-year yield: e dey fall

For the past ~2 months, 10-year yield don fall from 4.79% to 4.22% (but e still get long way to go).

2/ The $DXY (wey track US dollar value): e dey fall

And e no just fall, e dey drop fast-fast – the $DXY see the sharpest 2-day fall since July 2023.

3/ Truflation: e dey fall

Truflation dey track inflation real-time (no be like CPI wey dey always lag behind). Less economic growth = producers no go fit jack price anyhow.

Now – make we clear one thing:

This whole ‘Trump dey crash economy so dem fit refinance cheaper’ na just theory. E never sure.

Trump fit just be mumu wey no sabi economy, or e fit dey play 4D chess.

Or e fit be say Trump brain no too dey there, but e get better economic gurus for e team wey dey play the 4D chess for am.

Anyhow e be, US gatz make rates fall if dem wan refinance.

The good news be say: most of the moves we talk (tariffs, Zelensky wahala, Musk sack spree) dey inside US government control.

So the ‘short term pain for long term gain’ wey be say:

US economy go cool small for short term →

Government go refinance the debt →

Later dem go cancel tariffs, settle with Zelensky, and tell Elon make e calm down, so the economy fit bounce back (while dem push the debt wahala enter future)

Na real possibility be dat.

Again, nothing sure yet but if you dey ask yourself “why this government dey always dey do anyhow?? E no dey ever get head.”

This fit be one reason.

Wetin go happen? Nobody sabi but we dey hope say e go work. Because if e work, e mean say:

Things no bad reach as e dey look 

Markets fit just blow from here

Froala Editor