The U.S. government is paying more to borrow, and it is running out of easy ways to rein in its borrowing costs.
Long-term Treasury yields are near their highest in two decades, and the causes do not look temporary. Washington is selling huge amounts of debt to cover deficits that are not shrinking. Inflation has been slow to cool. And an AI investment boom is keeping the economy strong enough that rates aren’t falling, even though housing and autos are struggling.
The result is an interest bill of about US$1 trillion a year on debt of more than US$40 trillion.
Washington has ways to push back, from leaning more…