U.S. debt is set to hit $40 trillion, months earlier than expected, as bond yields rise

Live updates

1. 25d ago

   U.S. National Debt Surpasses $40 Trillion

   United States federal debt exceeded $40 trillion this week, marking the first time the balance has reached this level. Treasury data indicates the debt has more than doubled over the last ten years. This surge stems from tax cuts and trillions in pandemic-era spending, which has increased national interest payments. The growth in debt coincides with the government issuing more Treasury bonds to fund a growing fiscal deficit, potentially increasing the cost of consumer borrowing for mortgages and auto loans.

   Why it matters

   Rising debt levels can crowd out private investment and increase borrowing costs for the general public. The current trend follows a decade of rapid expansion in federal spending and tax reductions. Market stability now depends on the government's ability to manage these deficits amidst bond market turbulence.

   What is confirmed

   • The U.S. national debt surpassed $40 trillion this week.
   • Federal debt has more than doubled in less than a decade.

   Still unconfirmed

   • The U.S. government is flooding the market with Treasury bonds to cover a ballooning fiscal deficit.

   What to watch next

   • Changes in mortgage and auto loan interest rates
   • New Treasury data on interest payment totals
   Sources used for this update (5)

   1. www.cbsnews.com — National debt tops $40 trillion after doubling in less than a decade, Treasury data shows
   2. time.com — How Much the National Debt Grew Under Trump and Biden
   3. www.businessinsider.com — What's happening with the national debt — and how it could affect your wallet
   4. biz.heraldcorp.com — Mortgage rates could hit 8% as bond market turbulence pushes borrowing costs higher
   5. biz.heraldcorp.com — The bond flood AI built is now the tide rising against it
   confidence 95%
2. 26d ago

   US debt set to hit $40 trillion months earlier than expected

   The United States' national debt is nearing $40 trillion, months earlier than previously expected, as bond yields rise. This development has raised concerns among investors and economists, with Bank of America warning against bonds. The increasing debt has sparked fears about the potential impact on the economy, including crowding out private investment and harming families, students, and retirees.

   Why it matters

   The US national debt has been steadily increasing, with federal spending outpacing projections. The debt ceiling has been a contentious issue in the US, with lawmakers struggling to reach an agreement. The country's debt-to-GDP ratio has also been rising, sparking concerns about fiscal sustainability. Economists have warned that the high debt levels could lead to higher interest rates, reduced economic growth, and increased taxes.

   What is confirmed

   • The US national debt is nearing $40 trillion.
   • Bank of America has warned against bonds due to the rising US debt.
   • Federal spending has outpaced projections, contributing to the increasing debt.
   • The high debt levels could lead to higher interest rates and reduced economic growth.

   What to watch next

   • The US government's budget announcement and its impact on the debt ceiling
   • The Federal Reserve's decision on interest rates and its effect on bond yields
   • The Congressional Budget Office's (CBO) updated projections on the US debt
   Sources used for this update (13)

   1. qz.com — U.S. national debt nearing $40 trillion as BofA warns against bonds
   2. Barron's — The National Debt Is Wreaking Havoc With Bonds. Where We Go From Here.
   3. The Washington Post — Opinion | The 2030s will bring a fiscal cliff. Here’s how it got so steep.
   4. WSJ — No One Wants to Talk About the Debt
   5. The Washington Post — U.S. debt set to hit $40 trillion months earlier than expected
   6. Money Talks News — The National Debt Is About to Top $40 Trillion. Here’s Why the Stock Market Doesn’t Care — and Why You Should
   7. Bipartisan Policy Center — Crowding Out: How Rising Public Debt Squeezes the Economy
   8. The Washington Post — Opinion | Washington’s $40 trillion milestone
   9. PBS — National debt nears $40 trillion — why does that matter?
   10. Yahoo Finance — With the national debt nearing $40 trillion, Bank of America has a warning for bond investors
   11. The Dispatch — The Tragedy of U.S. Debt
   12. The Center Square — Report: U.S. debt crisis will directly harm families, students, retirees
   confidence 90%