The article mentions the yield is the highest since November 2023.
If I understand it correctly, this is different, however. In November the Fed was trying to increase rates to bring down inflation. But the high yields now are the result of a lack of private demand.
If that is indeed the case it’s very likely worrying.
nblgbg · 2h ago
Ofcourse that is the case, with tariffs the demand for dollar also going down and leads to this !
I'm told the Wall Street folk will need to buy bonds or Trump will sink the ship. The question is, how do you expect him to refinance 7T in debt by the end of 25? Implode the dollar?
mindslight · 7h ago
Does anyone else have the sickening feeling that their actual plan is to straight up destroy USD, with the looters fleeing to hard assets and foreign/crypto currency, and the plebs' currency crisis then serving as the justification for naked fascism red in tooth and claw? With the narrative then shifting to the usual "Democrats did this! And we tried to stop it but we were too late!" nonsense, backed up by an army of "AI" spambots.
The tariff tantrum, destroying US soft power institutions with DOGE, alienating all of our allies with petty feuds, the constant framing of the United States' enviable global positions as bad things. None of these things make any sense if you actually want the United States to succeed.
jameslk · 5h ago
This present issue has been caused by decades of bad fiscal policy by both parties:
Here for example, the Congressional Budget Office, forecasted federal debt as a percent of GDP would continue to rise unchecked, back in 2023: https://www.cbo.gov/publication/59014
The only presidential politician who sounded the alarm was Ross Perot, all the way back in the 90s.
Lyn Alden has been talking about this for a long time. If you want a good intro to the problem, I’d recommend this article of hers:
Clinton balanced the budget back in the 90’s. Biden and Obama’s terms were almost entirely defined by picking up economic disasters the previous administration caused. (2009 marked the beginning of the housing crisis, bank defaults due to deregulation and occupy wall street. 2021 was mid pandemic, after Trump spent years printing money with his zero interest rate stuff and tax cuts. He also fired the US funded team that China relied on for early pandemic detection and response.)
So, claiming this problem is bipartisan is nonsense. I’ll blame the dems for lots of stuff, but wildly inflationary fiscal policies and intentionally destructive economic policies aren’t on the list.
jameslk · 3h ago
How did you come to the conclusion that Clinton balanced the budget?
When have any of these presidents successfully pushed for reducing the federal deficit during their tenures? Any actual reductions to the debt you’ve seen?
What’s causing you to focus on presidents rather than congressional actions?
How do you think fiscal policy keeps getting passed through congress when there’s largely two parties that have to agree to get it done?
A surplus in the billions for a few years did not meaningfully change a federal debt that’s in the trillions. Further, the surplus that paid down public debt was completely wiped out by social security and Medicare liabilities during that time
Better than nothing you might say, but not the structural change needed to get the US out of the hole
seanmcdirmid · 2h ago
The deficit was gone in Clinton’s last term, and there was a surplus for four years. Cheney then said “surpluses are evil” and that was that. Sustained surpluses over time would wipe out debt obviously, but we’ve only been able to do that for one term.
hedora · 4h ago
I should also add: Trump 2 inherited a stable economy with massive investments in US manufacturing.
Early indications suggest he has already ruined it with tariffs, erratic jailing of skilled laborers and gutting of the government programs and agencies that were supporting the investment in the first place. The dollar has dropped 10% since inauguration day, inflation is way up and the deficit is ballooning.
In the 90s, the percentage of young to old was vastly different.
SS/Medicare will bankrupt the country without reforms.
seanmcdirmid · 2h ago
ss/Medicare are still owed by general budget, so they are still technically in surplus. But yet, eventually they will be in deficit (well, at least social security, Medicare isn’t capped on income so is more stable). SS could be fixed quickly by uncapping the limit on income that it is applied to.
Yeul · 2h ago
If only the US had prepared for this statistical event instead of handing out trillions in tax cuts.
hedora · 2h ago
Yeah; no one could have seen this coming back in 2025.
mindslight · 3h ago
What non-USD-denominated liabilities do SS/Medicare have? Those would be required in order for the country to go bankrupt.
hedora · 3h ago
Social Security is a trust fund and is set up so that it cannot lose money.
Congress has been stealing money from the fund for years, but that’s not Social Security’s fault. Claiming it needs reform is like blaming account holders after the president of the bank embezzles their deposits.
mindslight · 4h ago
> This present issue has been caused by decades of bad fiscal policy by both parties
So I completely agree with this statement, but I completely disagree with the metric you've chosen to illustrate it.
"National debt" only exists due to the martingale of the Federal Reserve neutering the government's own monetary sovereignty. If we need to have an inflationary currency, then the new money should be spent by Congress on deliberate public goals - it's another tax.
You can tell "national debt" is a dodgy metric because it combines two very different things into one scary-in-the-context-of-household-finances thing. The portion of "the debt" that is Treasuries held by the Federal Reserve is the lesser bit of monetary creation that was actually spent for public goals, in spite of the fake "fiscal responsibility" narrative. It is moot as far as debt goes - nothing actually happens if it compounds to infinity.
The other portion of "the debt" that is held by private/foreign owners is the government functioning as a bank account of last resort, and could very well just be at the central bank instead.
What we currently have is a dog and pony show to pretend that we don't have this centralized fountain of money, in order for the financial industry to keep getting the first cut of low interest loans (which have mostly gone into bidding up the asset bubbles).
jameslk · 1h ago
This is basically a modern money theory view (correct me if I’m wrong)?
It relies on discipline in the government to prevent inflation, e.g. raising taxes and cutting spending. But this is a similar problem to what we have already. There is no discipline, just short term thinking due to bad incentives.
Perhaps, from the bits I've read? I have arrived at it coming from an Austrian/conservative economics perspective. It's clear that we have had profligate monetary creation for decades without corresponding high across-the-board price inflation. My older self is also willing to accept the orthodox response to Gresham's law whereby a deflationary currency would be quickly replaced with a different inflating one. So then the question becomes what are we spending the new money on? Presently that is mostly subsidized low-interest loans.
If your concern is discipline, then it's easy enough to imagine a department similar to the Fed that comes up with a figure of how much new money to create for the right amount of average price inflation, with much discretionary spending by Congress being set in terms of that figure. That would surely be more responsible than the current system where one political team talks in terms of a pretend "fiscal responsibility" that only hamstrings Congress but doesn't actually affect monetary inflation.
sorcerer-mar · 5h ago
They make a lot of sense if you consider that the man up top is an actual stupid person and he is surrounded by sycophants. He has suggested for decades that he understands trade deficits to be identical to subsidies. He prefers mob-boss dynamics as opposed to mutual alliances. He legitimately thinks he can engineer a market economy's prices with his closed-door meetings with CEO buddies.
It is gobsmackingly dumb, but remember we have no evidence of him being anything other than gobsmackingly dumb. It's a very parsimonious explanation of everything he does.
platevoltage · 4h ago
I mean, being born rich makes it way easier to fail upwards.
ty6853 · 6h ago
Anyone with 0.1% of a brain switched to hard assets during the COVID ~0% money printing mania.
hshdhdhj4444 · 6h ago
And they would have lost a record increase in U.S. assets across the board, including the US dollar, which should have gone down if the problem was money printing.
It’s rare to have such a clearly evident case of cause and effect. We know why yields are going up. Because investors don’t believe the U.S. government can control their budget deficits.
The recent rising yields have little to do with money printing from 4-5 years ago.
hedora · 4h ago
Also, 0% interest was a thing for years before covid. It was pretty much the entire trump administration.
(Back then, we bet on unprecedented inflation, and that’s been working out great so far.)
Yeul · 2h ago
Trump having a plan would be the best outcome.
nemothekid · 6h ago
>Does anyone else have the sickening feeling that their actual plan is to straight up destroy USD
Stephen Miran, the chair of the Council of Economic Advisers under Trump, is pretty much trying to do this. He published 'A User's Guide to Restructuring the Global Trading System', and it pretty much outlines why they should destroy the USD - in order to bring manufacturing home, so that the warhawks will no longer have any reason to not start a war with China
suraci · 5h ago
I like Stephen Miran, I always like people who are (relatively) honest
> CEA Chairman Steve Miran Hudson Institute Event Remarks
It's a bit of a stretch to call this juxtaposition of topics, with absolutely zero analysis of how they're connected, honest:
> we tax hardworking Americans mightily to finance global security. On the financial side, the reserve function of the dollar has caused persistent currency distortions and contributed, along with other countries’ unfair barriers to trade, to unsustainable trade deficits.
Money is fungible between these two concerns. The excess demand for USD is a source of revenue for our economic empire, realized by the continual monetary inflation without nearly as much corresponding price inflation. Some of that monetary inflation has been used by the government (~"deficit spending"), but the sheer majority has been getting dumped into the financial industry to bid up existing assets as a handout to the rich. That is what has left the American worker high and dry - near complete inability for the US government to use that already-centralized revenue to help wider society, due to a political movement based around fake austerity.
The article continues on using the passive voice to describe multiple things that the US government could have put a stop to any time it wanted, framed as if they were being done to us by other countries. For example:
> in the years running up to the 2008 crash, China along with many foreign financial institutions, increased their holdings of U.S. mortgage debt, which helped fuel the housing bubble, forcing hundreds of billions of dollars of credit into the housing sector without regard as to whether the investments made sense
Obviously if the government had set interest rates higher rather than lower, there would have been fewer mortgage bonds to buy and the dollars would have had to go elsewhere. I don't know if this pattern is deliberate or just an inevitable result of the bizzarro framing where having the world reserve currency is asserted to be a liability, but either way it is most certainly not honest.
If I understand it correctly, this is different, however. In November the Fed was trying to increase rates to bring down inflation. But the high yields now are the result of a lack of private demand.
If that is indeed the case it’s very likely worrying.
https://www.macrotrends.net/2521/30-year-treasury-bond-rate-...
The tariff tantrum, destroying US soft power institutions with DOGE, alienating all of our allies with petty feuds, the constant framing of the United States' enviable global positions as bad things. None of these things make any sense if you actually want the United States to succeed.
https://fred.stlouisfed.org/series/GFDEGDQ188S
Here for example, the Congressional Budget Office, forecasted federal debt as a percent of GDP would continue to rise unchecked, back in 2023: https://www.cbo.gov/publication/59014
The only presidential politician who sounded the alarm was Ross Perot, all the way back in the 90s.
Lyn Alden has been talking about this for a long time. If you want a good intro to the problem, I’d recommend this article of hers:
https://www.lynalden.com/september-2024-newsletter/
So, claiming this problem is bipartisan is nonsense. I’ll blame the dems for lots of stuff, but wildly inflationary fiscal policies and intentionally destructive economic policies aren’t on the list.
When have any of these presidents successfully pushed for reducing the federal deficit during their tenures? Any actual reductions to the debt you’ve seen?
What’s causing you to focus on presidents rather than congressional actions?
How do you think fiscal policy keeps getting passed through congress when there’s largely two parties that have to agree to get it done?
Because the deficit was positive between 1997 and 2001, during Bill Clinton’s second term as POTUS.
https://fred.stlouisfed.org/series/GFDEBTN
A surplus in the billions for a few years did not meaningfully change a federal debt that’s in the trillions. Further, the surplus that paid down public debt was completely wiped out by social security and Medicare liabilities during that time
Better than nothing you might say, but not the structural change needed to get the US out of the hole
Early indications suggest he has already ruined it with tariffs, erratic jailing of skilled laborers and gutting of the government programs and agencies that were supporting the investment in the first place. The dollar has dropped 10% since inauguration day, inflation is way up and the deficit is ballooning.
https://fred.stlouisfed.org/series/C307RC1Q027SBEA
https://www.exchange-rates.org/converter/usd-eur
SS/Medicare will bankrupt the country without reforms.
Congress has been stealing money from the fund for years, but that’s not Social Security’s fault. Claiming it needs reform is like blaming account holders after the president of the bank embezzles their deposits.
So I completely agree with this statement, but I completely disagree with the metric you've chosen to illustrate it.
"National debt" only exists due to the martingale of the Federal Reserve neutering the government's own monetary sovereignty. If we need to have an inflationary currency, then the new money should be spent by Congress on deliberate public goals - it's another tax.
You can tell "national debt" is a dodgy metric because it combines two very different things into one scary-in-the-context-of-household-finances thing. The portion of "the debt" that is Treasuries held by the Federal Reserve is the lesser bit of monetary creation that was actually spent for public goals, in spite of the fake "fiscal responsibility" narrative. It is moot as far as debt goes - nothing actually happens if it compounds to infinity.
The other portion of "the debt" that is held by private/foreign owners is the government functioning as a bank account of last resort, and could very well just be at the central bank instead.
What we currently have is a dog and pony show to pretend that we don't have this centralized fountain of money, in order for the financial industry to keep getting the first cut of low interest loans (which have mostly gone into bidding up the asset bubbles).
It relies on discipline in the government to prevent inflation, e.g. raising taxes and cutting spending. But this is a similar problem to what we have already. There is no discipline, just short term thinking due to bad incentives.
http://www.thomaspalley.com/docs/articles/macro_theory/mmt_r...
If your concern is discipline, then it's easy enough to imagine a department similar to the Fed that comes up with a figure of how much new money to create for the right amount of average price inflation, with much discretionary spending by Congress being set in terms of that figure. That would surely be more responsible than the current system where one political team talks in terms of a pretend "fiscal responsibility" that only hamstrings Congress but doesn't actually affect monetary inflation.
It is gobsmackingly dumb, but remember we have no evidence of him being anything other than gobsmackingly dumb. It's a very parsimonious explanation of everything he does.
It’s rare to have such a clearly evident case of cause and effect. We know why yields are going up. Because investors don’t believe the U.S. government can control their budget deficits.
The recent rising yields have little to do with money printing from 4-5 years ago.
(Back then, we bet on unprecedented inflation, and that’s been working out great so far.)
Stephen Miran, the chair of the Council of Economic Advisers under Trump, is pretty much trying to do this. He published 'A User's Guide to Restructuring the Global Trading System', and it pretty much outlines why they should destroy the USD - in order to bring manufacturing home, so that the warhawks will no longer have any reason to not start a war with China
> CEA Chairman Steve Miran Hudson Institute Event Remarks
https://www.whitehouse.gov/briefings-statements/2025/04/cea-...
> we tax hardworking Americans mightily to finance global security. On the financial side, the reserve function of the dollar has caused persistent currency distortions and contributed, along with other countries’ unfair barriers to trade, to unsustainable trade deficits.
Money is fungible between these two concerns. The excess demand for USD is a source of revenue for our economic empire, realized by the continual monetary inflation without nearly as much corresponding price inflation. Some of that monetary inflation has been used by the government (~"deficit spending"), but the sheer majority has been getting dumped into the financial industry to bid up existing assets as a handout to the rich. That is what has left the American worker high and dry - near complete inability for the US government to use that already-centralized revenue to help wider society, due to a political movement based around fake austerity.
The article continues on using the passive voice to describe multiple things that the US government could have put a stop to any time it wanted, framed as if they were being done to us by other countries. For example:
> in the years running up to the 2008 crash, China along with many foreign financial institutions, increased their holdings of U.S. mortgage debt, which helped fuel the housing bubble, forcing hundreds of billions of dollars of credit into the housing sector without regard as to whether the investments made sense
Obviously if the government had set interest rates higher rather than lower, there would have been fewer mortgage bonds to buy and the dollars would have had to go elsewhere. I don't know if this pattern is deliberate or just an inevitable result of the bizzarro framing where having the world reserve currency is asserted to be a liability, but either way it is most certainly not honest.