International markets are rattled by global events. That was made clear by the Aug. 18 widespread global selloff of U.S. Treasury securities, raising 30-year yields to roughly 5.34%, the highest level since 2007.

There are several causes for the rising investor anxiety. This includes renewed conflict in the Middle East, along with a continued guessing game about the Federal Reserve’s intentions regarding interest rates.

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Primarily, though, America’s bleak fiscal situation is quelling investor confidence. The U.S. Treasury bond selloff coincided with the nonpartisan Congressional Budget Office’s release of statistics that the national debt is about to cross the $40 trillion threshold. Put another way, existing national debt now consumes 3.3% of the entire U.S. economic output and 19% of every dollar Uncle Sam collects.

And of course, elevated borrowing costs have trickled down to ticked-off consumers; 30-year fixed mortgage rates remain above 6.7%, 70 basis points higher than they were six months ago.

An investor warning shot

Bond investors are correctly sounding the alarm that the federal deficit is no longer tenable. CBO has raised its deficit projection for fiscal 2026 by $200 billion to $2.1 trillion. The impending fiscal crisis is not the $40 trillion........

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