US debt fears deepen as 10-year yields surge above 5% and outpace forecasts

The 10-year U.S. Treasury yield topped 5% this past week, the highest since 2007, and has outpaced the Congressional Budget Office’s February long-range projections. Higher borrowing costs threaten the government’s servicing of roughly $40 trillion in debt and about $2 trillion in annual deficits, with CFRB warning of a potential debt spiral and fiscal crisis if yields stay elevated. Veteran market observers have shifted from complacency to concern, noting the combination of rising yields, persistent deficits, and geopolitical risk could keep U.S. borrowing costs higher for longer, even as energy prices and the Iran conflict influence the trajectory.