Long-term borrowing costs in the US have increased once more, despite the Treasury Department's recent announcement of intervention to reduce them. Earlier this week, the Treasury stated it would buy back more debt to lower rates charged by investors on global bond markets.
While rates on 30-year borrowing initially eased following the intervention, they have since risen again. On Friday, the interest rate on 30-year bonds reached approximately 5.27%.
Economists noted that the US government's surprise move proved short-lived, citing ongoing concerns about the level of borrowing as national debt has now exceeded $40tn. John Canavan, lead analyst at Oxford Economics, described the response to the intervention as "unsurprisingly short-lived," with traders focused on global borrowing amounts and increases in oil prices.
The US national debt has more than doubled in a decade, reaching $40tn on Wednesday. This rise reflects years of significant spending under both the Trump and Biden administrations, alongside higher interest payments.
Global borrowing costs have spiked in recent months, influenced by higher oil prices due to the US-Iran war disrupting supplies and increasing inflation fears. Large amounts of cash borrowed by tech firms for AI development and public spending outstripping tax revenues have also contributed to higher yields.