Investors are worried about the amount of debt the US government has piled up, and bond yields are one key indicator showing this.
Yields, or interest rates, on the 30-year treasury bonds rose above 5.3 per cent – a nearly two-decade high – fuelled by anxiety over the war in Iran, inflation, unstable government deficits and rampant spending on artificial intelligence.
The nearly $32 trillion (€27.4 trillion) market for US government bonds, called the treasury market, offers a clear signal of where the economy may be headed.
More specifically, it is the yield on the “benchmark” 10-year treasury note that tends to set the temperature for consumer interest rates, including mortgages and car loans. These yields can affect everything from student loans to the housing market. The yield on the 30-year treasury moves in sync with the 10-year bond.
The difference between that $32 trillion and the headline debt figure which hit a record $40 trillion this week is explained by the $8 trillion of intragovernmental holdings. The $32 trillion figure covers debt held by the public.
