Part 7/9:
The recent spike in treasury yields—from below 3.9% to nearly 4.2%—suggests that investors no longer regard U.S. government bonds as safe havens. This trend raises significant concerns for the federal government, which is already grappling with a substantial debt burden—approximately 120% of GDP—and ongoing deficits. If the economy falls into a recession, the need for tax revenues diminishes while high treasury yields amplify debt servicing costs, posing a risk of a full-blown debt crisis.