Archive for September 2026
Treasury Yield Breaking 5%: What That Means for Consumers and Investors
Posted on: September 23, 2026
Two days ago, the US Treasury Ten-Year Yield (US10Y) blew past 5% to reach a high of 5.04%, reaching its highest level since July 2007. This is bad news for the government and consumers, but could be good news for investors.
1. Federal Budget and Debt Servicing
When yields stay above 5%, the government’s borrowing costs go through the roof. As existing debt matures – with $11T coming due in 2026 – the Treasury has to replace it with new debt issued at much higher interest rates. This could easily add $250B to $350B to the already high $1.2T interest payment. To cover this, the federal government will need to borrow even more money, which will drive borrowing costs even higher. This scenario is called a debt spiral – where rising debt and interest rates reinforce each other until the shit hits the fan.
