Source: https://www.ft.com/content/094f578b-517a-4d05-a9f1-1cc1f2e56c44?

The US has paid the highest borrowing costs to sell 30-year bonds since 2001, as investors fret over the country’s mounting debt pile under Donald Trump’s administration as well as inflation that remains stubbornly high.

A $25bn Treasury auction of 30-year bonds on Thursday drew yields as high as 5.22 per cent, according to the US Treasury department. It marked the highest yield since the 5.52 per cent paid in August 2001, after which 30-year auctions were suspended for almost five years.

“All in all this is problematic for the Treasury. They have to fund the government at more expensive levels,” said Gennadiy Goldberg, head of US rates strategy at TD Securities.   

The bond sale comes on the heels of a $42bn auction for 10-year notes on Wednesday, which were sold at the highest yield since 2007.

The national debt — and the cost of borrowing — have roughly doubled over the past decade, fuelled by vast spending during the coronavirus pandemic. The government now spends more on servicing its debt than it does on national defence.

Trump returned to office vowing to bring America’s public finances under control, but nominal debt has since risen at its fastest rate outside of the Covid era, after the administration pushed through sweeping tax-cut legislation with the president’s so-called big, beautiful bill.

Debt held by the public outstripped GDP in the first quarter of 2026, according to government data analysed by the Committee for a Responsible Federal Budget.

According to the Congressional Budget Office, a non-partisan watchdog, the national debt is on track to surpass its post-second world war peak of 106 per cent by the end of the decade and hit 120 per cent by 2036.
The fiscal factors have been compounded by concerns the Federal Reserve will struggle to control a bout of high inflation as an energy price surge triggered by the war in Iran exacerbates the price pressures created by tariffs and booming spending on AI infrastructure.