0.1 point on interest rates is $379 billion over ten years
Source. CBO, How Changes in Economic Conditions Might Affect the Federal Budget: 2026 to 2036 (April 2026), rules of thumb. Fiscal years 2027–2036.
Method and data
Method. The effect on the cumulative 2027–2036 deficit of a 0.1-percentage-point change in each economic variable, as CBO published them (read from a Wayback capture of the report page, as cbo.gov refuses automated requests). CBO describes the rules of thumb as roughly symmetrical, so they can be read in either direction. Higher inflation raises the deficit because nominal interest rates rise with it.
| Lever | Added to the ten-year deficit ($bn) |
|---|---|
| Interest rates 0.1 point higher | 379 |
| Productivity growth 0.1 point slower | 317 |
| Inflation 0.1 point higher | 311 |
| Labor-force growth 0.1 point slower | 166 |
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Higgins Strategy. “0.1 point on interest rates is $379 billion over ten years” Exhibit 6, The Interest Bill (Study XII). October 12, 2026. https://higginsstrategy.com/charts/12-04-levers-cbo-rules-of-thumb/