The sharp rise in US bond yields, fueled by persistent inflation and the explosion of public debt, rekindles fears of a future major financial crisis in the United States.
The interest rates of American state bonds rose on Wednesday to levels not seen in ten months, surprised by a significantly higher than expected producer inflation in April. Around 12:45 pm this Wednesday, the 10-year yield exceeded 4.48%, the highest since July 2025. Its longer-term equivalent, the 30-year yield, followed the same trend, even surpassing 5%, a level it had not reached since October 2023. By comparison, the “French 10-year” is at 3.74%, much lower than its American equivalent. Before the first Israeli-American strikes on Iran, the 10-year yield in the United States was at 3.94%.
This fuels fears of a crisis in American debt that now exceeds 125% of the American GDP, 20 points higher than ten years ago. And the continuous forward march is expected to continue for a long time based on the latest IMF forecasts. According to the international institution, US debt, which is already the highest in the world in value, is expected to increase by more than 20 points by the end of the decade, to exceed 143% of GDP in 2030. A ratio that would then be higher than that of Italy or Greece, countries long mocked even across the Atlantic for their lack of budgetary seriousness.
A catastrophic scenario
The American think tank No Labels recently warned of the risk of a serious financial crisis in the United States, comparable to the Great Depression of 1929, due to the explosion of American public debt, which now exceeds 39,000 billion dollars, and a budget deficit close to 6% of GDP.
In a report entitled “Nightmare on Main Street”, the organization envisions a scenario where, starting in 2028, investors would begin to lose confidence in the US’s ability to repay their debt. Treasury bond auctions would then become difficult, forcing the state to offer increasingly high 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 American debt are expected to exceed $1 trillion in fiscal year 2026, three times more than in 2020. With $1.9 trillion this year, the federal deficit is projected to reach $3.1 trillion within the next ten years.
