The U.S. Bond Market Is In Trouble

TL;DR

Rising U.S. bond yields risk triggering a debt death spiral as America's nearly $40 trillion debt grows at an unsustainable rate.

Key Points

• 1.The danger zone for bond yields is 4.6–4.8%. Once yields hit that range, borrowing costs rise, deficits grow, requiring more borrowing, which pushes rates even higher — a self-reinforcing debt death spiral.
• 2.America's ~$40 trillion debt accelerates the spiral's speed. At that scale, even small increases in interest rates dramatically inflate the cost of financing the national debt, compounding the crisis quickly.
• 3.Jerome Powell has warned the U.S. debt growth rate is unsustainable. The concern is not the absolute debt level but its accelerating growth, which burdens both current and future generations.