US Debt Tops $40 Trillion, Prompting Fed Warning on Treasury Investor Confidence
Thomas Barkin, president of the Federal Reserve Bank of Richmond and a 2027 FOMC voter, has warned that the US government's mounting debt could eventually prompt Treasury investors to stop buying if borrowing continues to rise.
The yield on the 30-year US Treasury bond has risen to levels not seen since before the 2008 financial crisis, narrowing the room for monetary policy maneuvering. The current level of debt is a persistent 'headwind' that the Federal Reserve must contend with, according to Barkin.
US government debt has now surpassed $40 trillion, and yields on 30-year Treasury bonds have risen to levels not seen since before the 2008 global financial crisis, driven by both fiscal concerns and inflationary risks. The implications of this warning extend beyond the bond market, as long-term yields rise, both corporate bonds and equity valuations are coming under renewed pricing pressure.
The US national debt surpassed $40 trillion in August 2026, several months earlier than previously projected. Meanwhile, the ratio of publicly held debt to GDP has approached 100%, a level that has historically unsettled bond investors.