Surging Treasury Yields Raise Alarm Over U.S. Debt Sustainability

Surging Treasury yields are raising concerns about the United States’ ability to manage its growing national debt.

Long-term yields are projected to average around 4.65% for 30-year bonds and 4.15% for 10-year bonds through 2036.

In the days before the Memorial Day weekend, 30-year Treasury yields reached 5.2%, their highest level in 19 years, while the 10-year yield climbed to 4.7%, its highest since 2007.

If sustained, such levels could significantly increase federal interest costs, according to analysis cited by Shawn Tully in Fortune.

Rising interest rates reduce fiscal flexibility, as higher borrowing costs consume a larger share of government revenue, potentially crowding out spending on programs such as defense, Social Security, and Medicare.

The Congressional Budget Office (CBO) projects long-term yields averaging around 4.65% for 30-year bonds and 4.15% for 10-year bonds through 2036.

Even small deviations above these forecasts could significantly increase debt servicing costs over time. Analysts warn that interest payments could rise sharply over the next decade, potentially becoming one of the largest categories of federal spending.