The world’s most important bond market is losing some of its most reliable customers. Long-term institutional investors, foreign central banks, and sovereign wealth funds are collectively pulling back from US Treasuries at a moment when the government needs their money more than ever.
With total US federal debt now exceeding $40 trillion and publicly held debt sitting around $32.3 trillion (north of 100% of GDP), the buyers who historically absorbed that supply without flinching are demanding a lot more compensation for showing up.
The numbers tell a stark story
The 10-year Treasury yield climbed to roughly 4.80% in early September 2026, its highest level since early 2025. The 30-year yield is even more eye-catching, hitting between 5.27% and 5.32%, territory the market hasn’t visited since 2007.
Those aren’t just abstract basis points. They translate directly into what the government pays to borrow. Net federal interest expense is projected to exceed $1 trillion for fiscal 2026. To put that in perspective, the US is now spending more on debt service than it does on defense.
