The tab is coming due for America's borrowing binge
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The United States faces mounting costs as decades of excessive borrowing collide with surging energy prices amid Iran tensions. Long-term interest rates and consumer prices are climbing sharply, while the government spends some $2 trillion annually more than it collects in taxes, with cumulative debt now approaching 100% of GDP.
The tab is coming due for America's borrowing binge
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4 hours ago - Economy
The tab is coming due for America's borrowing binge
* Neil Irwin
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!Illustration of a white picket fence shaped like arrows trending upwards
*Illustration: Sarah Grillo/Axios*
Americans are facing a rising tab as a multi-decade borrowing binge collides with a spike in energy prices caused by the Iran war.
**The big picture:** Long-term interest rates are surging, as are consumer prices.
* It's a toxic mix of near-term inflation pressures and years of fiscal imbalance.
**Driving the news:** The yield on the benchmark 10-year U.S. Treasury note rose to 4.97% Friday, up a full percentage point since the end of February, and only a hair below its high since 2007.
* The rate on a 30-year fixed-rate mortgage has risen in lockstep, reaching 7.08% Friday, per Mortgage News Daily — the highest in more than a year.
**State of play:** The immediate catalyst Friday was an inflation report that showed consumer prices surging higher in August, with gasoline prices accounting for more than a third of the gain.
* Gasoline is now at a national average of $4.29 a gallon, while the price of diesel has climbed to over $6 a gallon.
**All this means that the Federal Reserve** is now expected to raise its target interest rate this week.
* But longer-term borrowing rates are set in global markets — and determined by bigger forces.
* The U.S. government is spending about $2 trillion a year more than it raises in taxes at a time the cumulative debt is already roughly 100% of a year's GDP.
* Long-term bond yields have been rising worldwide, reflecting both high government borrowing and demand for capital from the AI buildout.
**The intrigue:** The recent spikes have taken place in spite of interventions by Treasury Secretary Scott Bessent to try to smooth turbulent bond markets — efforts that haven't succeeded in making borrowing cheaper.
* And rather than focus on the deficit reduction the bond market wants, President Trump has floated the notion of $5,000 payments to all U.S. adult citizens if Republicans win midterm elections.
* The U.S. government is already spending around $1 trillion a year in interest on the debt, on track to rise to $2 trillion over the next decade, a new high as a share of the economy. If the recent surge in rates is sustained, those numbers will grow even higher.
**The bottom line:** The combination of near-term energy-driven inflation and the long-term debt trajectory means that it will cost more to borrow money for the foreseeable future.
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4 hours ago - Economy
The tab is coming due for America's borrowing binge
* Neil Irwin
*
*
*
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see more of our stories on Google.
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!Illustration of a white picket fence shaped like arrows trending upwards
*Illustration: Sarah Grillo/Axios*
Americans are facing a rising tab as a multi-decade borrowing binge collides with a spike in energy prices caused by the Iran war.
**The big picture:** Long-term interest rates are surging, as are consumer prices.
* It's a toxic mix of near-term inflation pressures and years of fiscal imbalance.
**Driving the news:** The yield on the benchmark 10-year U.S. Treasury note rose to 4.97% Friday, up a full percentage point since the end of February, and only a hair below its high since 2007.
* The rate on a 30-year fixed-rate mortgage has risen in lockstep, reaching 7.08% Friday, per Mortgage News Daily — the highest in more than a year.
**State of play:** The immediate catalyst Friday was an inflation report that showed consumer prices surging higher in August, with gasoline prices accounting for more than a third of the gain.
* Gasoline is now at a national average of $4.29 a gallon, while the price of diesel has climbed to over $6 a gallon.
**All this means that the Federal Reserve** is now expected to raise its target interest rate this week.
* But longer-term borrowing rates are set in global markets — and determined by bigger forces.
* The U.S. government is spending about $2 trillion a year more than it raises in taxes at a time the cumulative debt is already roughly 100% of a year's GDP.
* Long-term bond yields have been rising worldwide, reflecting both high government borrowing and demand for capital from the AI buildout.
**The intrigue:** The recent spikes have taken place in spite of interventions by Treasury Secretary Scott Bessent to try to smooth turbulent bond markets — efforts that haven't succeeded in making borrowing cheaper.
* And rather than focus on the deficit reduction the bond market wants, President Trump has floated the notion of $5,000 payments to all U.S. adult citizens if Republicans win midterm elections.
* The U.S. government is already spending around $1 trillion a year in interest on the debt, on track to rise to $2 trillion over the next decade, a new high as a share of the economy. If the recent surge in rates is sustained, those numbers will grow even higher.
**The bottom line:** The combination of near-term energy-driven inflation and the long-term debt trajectory means that it will cost more to borrow money for the foreseeable future.
*
*
*
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What to read next
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Smarter, faster on what matters.
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Axios Media Inc., 2026
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Tags:#الاقتصاد الأمريكي#أسعار الفائدة#الدين العام#التضخم#سوق السندات#السياسة المالية
Source: Axios
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