Here’s how much worse U.S. debt could get as Treasury yields surge to the highest levels in two decades

Soaring Treasury yields are raising concerns in Congress as their precipitous rise in recent months further darkens the outlook for U.S. debt.

The 10-year yield shot up to 5.23% on Friday, the highest level since 2007 and more than a full percentage point since right before the Iran war started. Meanwhile, the 30-year yield hit 5.49%, the highest since 2004.

With oil prices up due to the Middle East conflict, AI hyperscalers spending hundreds of billions a year, the economy running hot, and U.S. debt now at $40 trillion, Treasury yields have already blown past the Congressional Budget Office’s long-term outlook.

According to its most recent forecasts issued in February, the 10-year yield was seen at 4.1% this year, 4.2% in 2027, 4.3% from 2028 to 2031, and 4.4% from 2032 to 2036. Those projections seem quaint now.

In addition to setting the pace on other borrowing costs, yields determine how much the Treasury Department must pay in interest on the U.S. debt, which can accelerate as rates go up.

Annual interest expenses on the debt........

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