U.S. Debt Soars with High Interest

US DEBT
U.S. Debt Soars with High Interest

The U.S. debt burden is intensifying, with rising interest expenses now averaging $3 billion a day, according to Apollo Global Management’s chief economist, Torsten Sløk. This is up from $2 billion just two years ago, when the Federal Reserve started raising rates to combat inflation. While recent Fed rate cuts were expected to ease this burden by lowering bond yields, the situation has not improved as anticipated.

Sløk had estimated that if the Fed cut interest rates by 1 percentage point, it could reduce daily interest expenses from $3 billion to $2.5 billion. However, despite an initial drop in Treasury yields before the first rate cut, yields have since jumped. The 10-year Treasury yield has risen about 50 basis points to nearly 4.1%, and the two-year yield has increased to around 3.95%. This rise adds pressure on the Treasury Department as it auctions fresh debt to cover growing budget deficits.

For the fiscal year ending September 30, the U.S. budget deficit was $1.8 trillion, with $950 billion spent on interest alone—up 35% from the previous year due to higher rates. Even if Fed rate cuts eventually reduce interest costs, future budget deficits, exacerbated by the next president’s policies, are expected to continue adding to the national debt.

U.S. debt often increases before elections, but the reasons are complex. Typically, election years see increased government spending as politicians may push for policies or stimulus packages that appeal to voters. These could include infrastructure projects, social programs, or tax cuts aimed at boosting the economy or addressing key voter concerns.
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VaultCraft launches V2, TVL skyrockets above $100M

VaultCraft launches V2, partners with Safe, and secures $100M+ in Bitcoin

• Matrixport, Asia’s leading crypto providers, commits $100M+ in Bitcoin

• OKX Web3 to launch Safe Smart Vaults with $250K+ in rewards

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CRYPTO
Tesla moves Bitcoin before election

Tesla has moved $765 million worth of Bitcoin to unknown wallets, raising speculation about its next move. While it's unclear if the company plans to sell, Tesla remains the fourth-largest U.S. public company holding Bitcoin, after MicroStrategy and two mining firms. Tesla’s Bitcoin investment is a small portion of its market cap—less than 1%—but the company has a history of strategic crypto decisions.

Depending on the election outcome, the regulatory environment for crypto might shift, with stricter rules or increased scrutiny, which could prompt companies like Tesla to reassess their exposure. Additionally, inflation concerns, interest rates, and tax policies that tend to be influenced by election-year politics could also impact Tesla's financial strategies, including how it manages its assets like Bitcoin.

Given that Bitcoin and other cryptocurrencies can be highly sensitive to macroeconomic factors, Tesla may be taking preemptive steps to protect or capitalize on its position, knowing that the election could introduce new financial or regulatory challenges.
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CHINA
China's Growth Beats Economic Expectations

Markets in mainland China and Hong Kong rebounded on Friday as China’s economic growth exceeded expectations. China’s third-quarter GDP grew 4.6% year-over-year, slightly above forecasts, though down from 4.7% in the previous quarter. This growth, while below Beijing's 5% annual target, was still stronger than anticipated.

September data also showed retail sales rising 3.2%, beating estimates, while industrial output grew faster than expected at 5.4%. However, China’s house prices dropped 5.8% year-on-year, a larger decline than August’s 5.3% fall.
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NETFLIX
Netflix Surpasses Expectations with Subscriber Surge

Netflix exceeded Wall Street’s expectations in the third quarter, adding over 5 million subscribers despite challenges from last year's Hollywood strikes. Sales grew 15% to $9.83 billion, with earnings reaching $5.40 per share, surpassing analyst predictions of 4.52 million new subscribers. Netflix’s stock surged 5.4% to $724.89 in after-hours trading, continuing its recovery from a significant selloff in May 2022.

The company has added over 60 million new customers since then, partly driven by a crackdown on password sharing and a new, lower-priced subscription with ads. Netflix now has 282.7 million subscribers. Despite concerns that the password-sharing boost is temporary, Netflix is optimistic about future growth, projecting sales to increase 11% to 13% next year, potentially reaching $44 billion.

While Netflix’s advertising efforts and investment in live programming are still developing, it aims to strengthen its offering and expand its revenue streams in the coming years.
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Meme of the day

Word of the day
Zest

Zest refers to an enjoyably exciting quality, or to keen enjoyment itself. In culinary use, zestrefers to small pieces of the peel of a lemon, lime, orange, or other citrus fruit used as flavoring.

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