In the days before Memorial Day weekend, rates on 30-year Treasury bonds hit their highest level in 19 years at 5.2%, Fortune reports. The benchmark 10-year hit 4.7%, the highest level since mid-2007.
If those kinds of yields take hold, Fortune’s Shawn Tully writes, the scenario for federal interest expense posited in the Congressional Budget Office’s “Budget and Economic Outlook: 2026 to 2036,” issued in February, “descends from dire to near-disastrous.”
The takeaway, according to Tully, is that America’s track to fiscal safety has “lost all margin for error.”
“America’s got so little room to maneuver that even yields that modestly exceed the CBO’s ‘baseline,’ as the numbers compound in the years ahead, deliver a huge extra blow by crowding out big chunks of revenue that would otherwise go towards funding such essentials as Defense, Social Security and Medicare,” Tully writes.
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