Abe warning: If the US economy falls into recession, the federal government deficit will worsen after interest rate cuts.

As concerns about the US economic recession intensify, the latest analysis from Apollo Company shows that even with interest rate cuts, the federal budget deficit may deteriorate significantly. Apollo's chief economist Thorsten Strock pointed out that if the US falls into a recession, long-term interest rates may decrease, which would lower the government's cost of refinancing existing debt. However, he cautioned that any potential savings would be overshadowed by broader economic consequences. According to Apollo's calculations, for every two percentage point decrease in interest rates, the federal government could save approximately $500 billion in annual interest expenses. But the reality is more complex - historical data shows that economic recessions usually deepen the US budget deficit by about 4% of GDP through reduced tax revenues and increased social security spending like unemployment benefits. In terms of 2025 US dollar value, the institution stated that this would have a staggering impact of $1.3 trillion on government finances, more than double the amount saved from interest rate reductions. Strock concluded, "The key conclusion is: it is impossible to improve the budget deficit by inducing a recession, because during an economic downturn, the deterioration of government finances will be twice the amount saved in interest payments." The economist warned that the short-term benefits of borrowing costs may be offset by long-term fiscal pressures.