U.S. national debt has reached $40 trillion, with annual interest costs around $1 trillion and large budget deficits, a trajectory many view as unsustainable.

Treasury yields have risen since the Iran conflict began, prompting the Treasury to expand debt buybacks (to at least $4 billion per operation, potentially more) mainly to support demand for long-term bonds and calm markets.

Analysts differ on whether the yield surge reflects fiscal and inflation worries, thin August trading, or a return to more normal rates after years of ultra-low yields; buybacks are widely seen as temporary measures rather than a lasting fix.

The national debt crossed an unwelcome milestone: $40 trillion. It took the United States almost 200 years to register its first trillion. These days, it takes about 90 days to accumulate a trillion bucks. Nobody is surprised anymore, and perhaps the public will continue to shrug in a few years when America hits $50 trillion. To echo former Federal Reserve Chair Jerome Powell, this is entirely unsustainable – and the bond market agrees.

Treasury Intervenes in Bond Market

Short- and long-term Treasury yields have been rising across the US bond market since the war in Iran began in late February. The 30-year yield topped 5.31% for the first time since June 2007. The benchmark ten-year yield is the highest it has been since early 2025, while the two-year is flirting with 4.2%.

Market watchers have presented theories to understand what is happening. Investors could be losing sleep over the deteriorating fiscal picture. Traders might be worried about persistent war-driven inflation. Others could........

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