The U.S. government is heading into a massive refinancing period. About $9.6 trillion in marketable debt will mature over the next 12 months the largest amount ever due in a single year. That’s not just a headline number. That’s a number big enough to ripple across the entire financial system.
When government debt matures, it doesn’t get paid off like a credit card balance. It gets rolled over. In simple terms, the Treasury issues new debt to replace the old debt. The real question isn’t whether it will happen it will. The real question is: at what interest rate?
That’s where things get important.
Rates today are much higher than they were just a few years ago. If this debt gets refinanced at elevated yields, the government’s interest expenses increase sharply. Higher interest costs can tighten financial conditions and reduce flexibility in spending. But if rates fall during this period, refinancing becomes cheaper and pressure eases.
And this isn’t just a government story — it’s a market story.
When the Treasury issues large amounts of new debt, it absorbs liquidity from the system. That can push bond yields higher, strengthen or weaken the dollar depending on demand, and influence equities and even crypto. Liquidity is the lifeblood of markets. When trillions are moving, liquidity shifts.
The next year isn’t just about inflation or Fed decisions. It’s about demand for U.S. debt and how smoothly this refinancing wave unfolds.
Because when sums this large move through the system, markets don’t ignore it — they react to it.