US Treasury yields climbed sharply on August 31, propelled by rising international crude oil prices and market speculation that the Federal Reserve may hike interest rates to curb inflation.

Data from the 10-year Treasury bond dashboard system showed the benchmark yield rose 3.9 basis points to close at 4.756%, marking its highest level since January 15, 2025. Meanwhile, the 30-year Treasury yield advanced 3.7 basis points to settle at 5.244%. Notably, the 30-year yield had previously reached 5.31% on August 17, a level not seen since June 2007.

These elevated borrowing costs are believed to have prompted the US Treasury Department to expand its long-dated debt buyback program in recent days. On August 19, the Treasury announced that total US government debt had breached the $40 trillion threshold for the first time in history.

Institutions and market observers have issued warnings that a fresh fiscal crisis is brewing, as surging costs for social security programs and interest payments far outpace government revenues, which have been constrained by tax cuts. A report on August 22 highlighted that with public debt at a record high above $40 trillion, the federal government may be forced to adopt measures that could trigger public dissatisfaction.

The report noted that the US currently pays approximately $1 trillion in annual interest on its national debt. According to projections from the Peterson Institute for International Economics (PIIE), unless government spending or tax policies undergo significant reform, total US debt could balloon to $50 trillion within six years.

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