Concerns Over US Debt Growth

The growing US debt addiction is raising increasing concerns about whether it is transforming from a theoretical crisis into a tangible factor impacting global markets. The rise in borrowing costs, especially as the yield on ten-year US Treasury bonds now exceeds 4.8% and approaches 5%, could threaten the AI boom that depends on financing. These high costs increase the burden of servicing government debt, with interest payments on US debt surpassing 3% of GDP—its highest level in history. The rise in yields also raises questions about the sustainability of public debt and the slowdown of economic growth. While some consider that bond yields above 5% do not necessarily indicate a crisis, a prolonged period at these levels could hinder funding and potentially impact markets and technological advancements, as investors shift toward lower-risk bonds amid rising yields. This trend may slow growth in sectors like artificial intelligence.

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