US government borrowing costs reach highest level since 2007

The last time US government borrowing costs were this high, the iPhone had just launched and the word “subprime” was about to enter every household’s vocabulary. On August 18, the 30-year Treasury yield surged to approximately 5.3%, touching an intraday peak of 5.337% and marking the highest level since April 2007. The 10-year Treasury yield also pushed above 4.7%, a threshold that ripples through nearly every corner of the financial system. Why yields are climbing Inflation has not fully retreated. The Consumer Price Index for July came in at 3.4% year-over-year, still well above the Federal Reserve’s 2% target. Energy prices drove a significant portion of that pressure, rising 14.7% in the same period, partly tied to geopolitical friction in the Middle East, particularly tensions around Iran and the Strait of Hormuz, a chokepoint for a substantial share of global oil shipments. US national debt is approaching $40 trillion, having grown by more than $11 trillion since fiscal year 2019. The government is not just borrowing more in absolute terms; it is borrowing more into a market that is increasingly asking hard questions about whether those debts are sustainable at current intere...