Federal Reserve’s Barkin warns rising debt may deter investors from buying US bonds

Richmond Federal Reserve President Thomas Barkin delivered a blunt warning about the trajectory of US government debt: keep piling it on, and eventually bond buyers will walk away. With the national debt now exceeding $40 trillion, the message carries more weight than the usual Beltway hand-wringing about fiscal responsibility. Barkin described current debt levels as a persistent “wind” that the Fed must navigate. The 30-year Treasury yield has climbed to peaks not observed since before the Global Financial Crisis, driven by a toxic cocktail of fiscal concerns and lingering inflation risk. The $40 trillion elephant in the room The US national debt crossed the $40 trillion threshold in August 2026, arriving months ahead of previous estimates. Publicly held debt is now approaching 100% of GDP, a ratio that tends to make bond investors nervous. The Congressional Budget Office has projected significant increases in interest costs going forward. That creates a feedback loop: more debt means higher interest payments, which means more debt to cover those payments, which means higher interest payments. The Treasury Department has already started responding to the pressure. It announced buy...