US Debt Surges Past $40 Trillion, Markets on Edge

The US's total debt has reached $40 trillion, exceeding 120% of its GDP. This milestone was achieved in less than five years, with revenues taking a hit from President Donald Trump's 2017 tax cuts and spending surging during Covid-19.

Treasury Secretary Scott Bessent announced last week that the government would buy back at least double the bonds it had already said it would. This move is intended to cool yields on long-term US government bonds, but economists warn that markets' lack of confidence in this plan may be a major issue.

Bond yields have risen despite receding expectations of an interest rate hike by the US Federal Reserve. Elevated oil prices and a lack of clarity over the Fed's future moves are contributing to this trend.