Rising long-term borrowing costs add $2 trillion in federal debt expense over a decade as national debt exceeds $39 trillion.
The 30-year Treasury yield climbed to 5.19%, its highest level since 2007, signaling higher borrowing costs for the U.S. government. Each half-percentage-point increase adds roughly $2 trillion in federal debt expense over the next decade, as total national debt surpasses $39 trillion and annual interest payments exceed $1 trillion.
Rising yields are spreading economic pressure, with household debt reaching $18.8 trillion and credit card balances at $1.25 trillion. Consumers face multi-decade high borrowing costs, while oil near $100 per barrel threatens to reignite inflation, limiting the Federal Reserve’s ability to cut rates.
The bond market’s shift contrasts with the S&P 500’s resilience, as investors had bet on Fed rate cuts. However, persistent high yields may force a reassessment of monetary policy expectations.