- The yield on 30-year US Treasury bonds rose to 5.23pc on Thursday, its highest point since 2007.
- The potential for higher rates threatens to heap more pressure on the US national debt pile, which already stands at just under $40tn (£30tn).
- The US budget deficit is on track to increase by $3.4tn in the next 10 years as a result of Donald Trump’s tax-cutting One Big Beautiful Bill Act.
US government borrowing costs have reached a 19-year high, with the yield on 30-year Treasury bonds climbing to 5.23% as of Thursday. This increase follows the Federal Reserve's recent decision to maintain interest rates, despite internal divisions among rate-setters.
The potential for higher rates raises concerns about the sustainability of the US national debt, which is approaching $40 trillion. The US budget deficit is projected to grow by $3.4 trillion over the next decade, largely attributed to tax cuts implemented during Donald Trump’s administration.23
As borrowing costs rise, the implications for the economy could be significant, potentially leading to increased financial strain on both the government and taxpayers. The Federal Reserve's cautious stance reflects ongoing uncertainties in the economic landscape, prompting fears that further rate hikes may be necessary to combat inflationary pressures.
With the national debt already at a staggering level, the combination of rising borrowing costs and a growing deficit could pose serious challenges for future fiscal policy and economic stability.
“The yield on 30-year US Treasury bonds reached 5.23% on Thursday, marking its highest point since 2007. Additionally, the US budget deficit is projected to increase by $3.4tn over the next decade due to Donald Trump’s tax-cutting One Big Beautiful Bill Act.”
