The biggest victim of Fed rate hikes is the US government as interest on massive debt soars, billionaire investor Barry Sternlicht says

• The biggest victim of the Fed rate hikes is the US government, according to investor Barry Sternlicht.
• Higher rates means the US has to pay more money on interest expenses to service the federal debt. 
• Rates have to come down because it's simply too unaffordable to sustain, Sternlicht said.

The Federal Reserve's rate hikes have sent bond yields higher, slammed the housing market, and rattled the commercial real estate sector.

But the biggest victim might be the US government. 

That's according to billionaire investor Barry Sternlicht, CEO of Starwood Capital Group.

"Today, the biggest victim of the Fed increasing rates is actually the federal government that now has to pay 5% on $33 trillion dollars of debt," Sternlicht said Wednesday at Saudi Arabia's Future Investment Initiative.