Market Commentary | 01.09.2026 America's problem isn't the $40 trillion in debt. The real ailment is a hangover from a 2010s

The U.S. debt problem is becoming a refinancing and market-capacity problem rather than an imminent solvency crisis.

• U.S. national debt passed $40 trillion on August 19, 2026, after rising from $39 trillion in five months and from $19.4 trillion ten years ago; debt has already increased by $1.8 trillion in the current fiscal year.
• The July budget deficit reached $432.3 billion, while interest payments consume about 14% of the federal budget and exceed Medicare spending; the 30-year Treasury yield reached 5.34% on August 18, its highest level since April 2007.
• The authors attribute higher yields mainly to supply and demand: real rates rose from -0.4% at the end of 2021 to nearly 3%, Washington is borrowing 6% to 7% of GDP annually, and hyperscalers are competing with the Treasury for investors.
• The buyer base has weakened because the Federal Reserve reduced its Treasury portfolio from 2022 through 2025 and foreign central banks and reserve managers trimmed their holdings, while inflation expectations remained anchored at a 2.2% 30-year breakeven spread.
• Proposed or ongoing responses include Treasury buybacks and shorter issuance, relaxed capital rules for the eight largest U.S. banks, stablecoin reserve requirements that could generate up to $1 trillion of money-market demand, additional customs revenue, and possible Federal Reserve liquidity injections.

Takeaway: The authors see the current rate plateau as a return of compensation for term risk rather than a crisis, favor high-quality corporate bonds and equities with strong balance sheets, and caution against U.S. Treasuries and the dollar because of likely policy intervention.