U.S. debt is even worse than it seems, and rising Treasury yields are now an ‘all-hands-on-deck situation,’ top economist warns

The market for U.S. Treasuries has shown troubling signs lately, and rising yields are a clue that conditions are more dire than they appear, according to Robin Brooks, a senior fellow at the Brookings Institution.

In a Substack post on Tuesday, he said U.S. policy is now focused on preventing long-term borrowing costs from shooting higher and pointed to Treasury Secretary Scott Bessent’s efforts to double debt buybacks as well as Fed Chair Kevin Warsh’s Jackson Hole speech that reassured markets on his inflation-fighting credibility.

Brooks added that economic data releases that indicate weaker activity have failed to bring down long-term yields, unlike the historical pattern, revealing how much upward pressure is coming from the market.

“As far as I can tell, it’s an all-hands-on-deck situation where long-term yields are concerned,” he wrote.

Although Friday’s jobs report surprised to the upside, other economic data over the past month have consistently fallen short of expectations, according to Brooks. Rather markets sending yields lower to account for a slower economy and cooler inflation, yields have marched........

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