The sharp rise in US bond yields, fueled by persistent inflation and exploding public debt, revives fears of a future major financial crisis in the United States.
US Treasury bond yields rose on Wednesday to levels not seen in ten months, surprised by significantly higher than expected producer inflation in April. By 12:45 on Wednesday, the 10-year yield surpassed 4.48%, the highest since July 2025. The 30-year yield followed the same trend, surpassing 5%, a level not reached since October 2023. For comparison, the French 10-year yield is at 3.74%, much lower than its American counterpart. Before the first Israeli-American strikes on Iran, the 10-year US yield was at 3.94%.
This spike in bond yields fuels concerns about a US debt crisis that now exceeds 125% of American GDP, 20 points higher than a decade ago. According to the latest IMF forecasts, US debt, already the highest in the world in value, is expected to increase by more than 20 points by the end of the decade, reaching over 143% of GDP in 2030. This ratio would then be higher than that of Italy or Greece, countries long mocked even beyond the Atlantic for their lack of fiscal seriousness.
“A Catastrophic Scenario”
The American think tank No Labels recently warned of a serious financial crisis in the US, comparable to the Great Depression of 1929, due to the explosion of American public debt, now exceeding $39 trillion, and a budget deficit close to 6% of GDP.
In a report titled “Nightmare on Main Street,” the organization envisions a scenario where, starting in 2028, investors begin to lose confidence in the US’s ability to repay its debt. Treasury bond auctions would become difficult, forcing the government to offer increasingly higher interest rates, causing a drop in the value of bonds held by banks and investors. This loss of confidence would gradually trigger a financial panic that spreads throughout the American economy.
This extreme catastrophic scenario is deliberately designed to alert the federal government. According to the US Congressional Budget Office (CBO), interest payments on US debt are projected to exceed $1 trillion in fiscal year 2026, three times more than in 2020. With a deficit of $1.9 trillion this year, the federal deficit is expected to reach $3.1 trillion within ten years.
