Bond markets tilt to a higher-rate path for U.S. debt

A Reuters explainer says U.S. Treasuries still look safe, but debt dynamics are shifting as global rates rise and deficits stay large. Public debt sits near 100% of GDP and interest payments run about 3% of GDP, while growth remains around 2%—not enough to sustainably shrink the debt burden. Deficits have lingered at recession‑era levels even as the economy expands, aided by tax cuts and spending in aging demographics. The combination raises the risk of a debt cliff further out, prompting talk of potential Fed/treasury interventions to cap long-term yields. AI and other growth catalysts could help, but their timing and fiscal impact remain uncertain, making higher borrowing costs and tighter financing conditions a growing backdrop for U.S. debt sustainability.