Lyn Alden, the big brain in macroeconomics, is dropping some heavy truth bombs at the Bitcoin 2025 Conference in Vegas.

She’s saying the Federal Reserve? Yeah, they’ve lost the wheel on this runaway debt train in the U.S. financial system.

Mismanagement

See, the Fed’s usual playbook for taming inflation and credit growth is simple. They crank up interest rates, making borrowing more expensive, which cools off spending and slows debt growth.

This trick worked like a charm for decades. But now? The rules have changed, and the Fed’s brakes are toast.

The U.S. national debt has ballooned to 100% of the GDP. Yeah, the country owes as much as it produces in a year.

When the Fed hikes rates today, instead of slowing down borrowing, it actually pushes the government to borrow even more.

Why? Because higher rates mean the government’s interest payments on that massive $36.22 trillion debt skyrocket.

So the deficit grows faster than private sector debt shrinks. It’s like trying to stop a speeding train by stepping on the gas pedal.

It’s over?

Alden puts it bluntly, and said the party is over.

“They don’t have brakes anymore. Nothing stops this train because there’s no brakes attached to it anymore.”

Imagine that, your usual tools to control debt growth are completely useless now. It’s like the printer jamming every day in your office, and the IT guy throwing his hands up because the system’s just broken.

Between a rock and a hard place

And as always, it gets worse. Interest expenses are eating up a bigger slice of the federal budget than ever before.

For decades, interest rates were on a slow decline, making debt servicing manageable. Not anymore.

Rates have stopped falling structurally, and with debt at historic highs not seen since the 1940s, the government faces a brutal choice, keep rates low and watch everyone scramble for scarce assets, or keep rates high and watch the deficit balloon uncontrollably.

It’s a no-win scenario, guys. Alden’s warning is clear, the Fed’s usual tricks won’t cut it anymore.

The debt train is barreling forward, and the conductor’s out of options. So next time you’re stuck in a never-ending meeting that feels like it’s going nowhere, just remember, at least you’ve got brakes. The U.S. government? Not so much.

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