Data released by the U.S. Treasury Department on the 19th shows that the total U.S. federal government debt has surpassed $40 trillion (about 162.31 trillion ringgit).
The data reveals that as of the 18th, the total outstanding public debt of the U.S. federal government was $40.05 trillion. Of this, debt held by the public and intergovernmental holdings amounted to $32.27 trillion and $7.78 trillion, respectively.
According to The New York Times, for the fiscally fragile United States, breaching the $40 trillion government debt mark is an "ominous milestone."
On the 19th, Maya MacGuineas, chair of the Committee for a Responsible Federal Budget, stated in a release that the U.S. public debt now exceeds the size of the economy, the deficit as a share of gross domestic product (GDP) is double the sustainable target level, and interest payments surpass defense spending—altogether sounding the alarm.
She said: "$40 trillion in debt doesn’t just exist on government books—it permeates the entire economy and ultimately affects people’s wallets. The more we borrow, the worse inflation gets."
Bipartisan Policy Center President Margaret Spellings stated that the U.S. is currently pursuing an unsustainable fiscal policy.
She said: "We’re speeding toward a cliff, but refuse to turn the wheel."
In recent years, the U.S. federal government debt has maintained rapid growth, sparking concerns in the bond market and a rise in government bond yields. Increasing interest payments have further driven the expansion of total U.S. debt.
Curbing the Soaring Treasury Yields
In addition, on the 19th, the U.S. Treasury Department announced it would expand the scale of long-term Treasury buybacks to provide greater liquidity support for the bond market.
According to the statement, the liquidity-supporting buyback size for long-term Treasuries will be "at least doubled," from $2 billion to $4 billion, covering bonds with maturities from 10 to 30 years.
Recently, yields on long-term U.S. Treasuries have continued to climb. On the 17th, the 30-year U.S. Treasury yield reached 5.31%, setting a new high since June 2007. Rising long-term yields mean the U.S. government will face even higher borrowing costs when issuing bonds in the future.
Natixis analyst Briggs believes the Treasury is signaling by expanding the buyback scale that if Treasury yields rise excessively, the Department will take action.
After the Treasury's announcement, U.S. long-term Treasury yields fell significantly.