US Creditworthiness in Question as Lenders Demand Higher Interest Rates
The United States' creditworthiness has been questioned by lenders around the world, leading to higher interest rates for American borrowers. The global bond market is demanding higher yields from governments, with countries like Germany and France paying less than the US.
America's debt-to-GDP ratio is about double that of other large democracies, such as Germany and Scandinavian countries. This has led to higher borrowing costs for the US, with interest rates exceeding 5% on a 10-year Treasury bond.
The situation can be attributed in part to the policies of former President Trump, who oversaw a significant increase in national debt during his presidency. The US debt surpassed $40 trillion in August 2026 and is projected to exceed $50 trillion by 2030.
The erosion of the Federal Reserve's independence under Trump has also contributed to the rising borrowing costs. Trump attempted to remove a Fed governor, threatened to fire then-Chair Jerome Powell, and initiated criminal investigations against him.