The United states gross public debt has reached $40 000 billion.
While the volume of the debt is massive, it is primarily the cost that poses a problem for the government: the yield on ten-year Treasury bonds—a sort of economic barometer—has hit the symbolic 5% mark last week. This rate has surged by 1% in just six months, driven by the war — and the defeat — of the United States against Iran.
Treasury Secretary Scott Bessent tried to extinguish the fire caused by these rising costs by issuing shorter-term debt (essentially using his credit card) to buy back $4 billion in long-term debt (which is equivalent of his mortgage). If your banker saw you doing that, you’d normally get a slap on the wrist. It didn’t work here either : in fact, it may even have been counterproductive. You can’t take investors for fools…
Oddly enough, the job market is looking quite healthy, with an unemployment rate of just 4% (assuming one can trust official statistics, which have been heavily manipulated since January 2025). However, prices are spiraling out of control: the average price of a gallon of gasoline stands at $4.37, up from $2.90 before the war. Meanwhile, the average price of a gallon of diesel — widely used in freight transport and agriculture — has hit an all-time high of $6.30.
That covers the inflation imported due to the war in the Strait of Hormuz. But there is another component of domestic inflation that remains largely underestimated: the inflation caused by Donnie boy trade wars. That moron has dragged the US economy into a standoff with Canada—an economy that is marginal compared to that of the United States, yet possesses an immense capacity to cause deep difficulties.
So, Mr. NotMyPresident can rant and rave all he wants in the Oval Office, but the Fed’s decision to raise its benchmark interest rate by a quarter point — bringing it to between 3.75% and 4% (a collective decision in which the Chairman’s vote is just one factor) — this is almost good news.
However, this hike is too timid given the scale of the current price surge. And above all, it comes too late. Acting six months earlier might have helped put the brakes on that fuc*** pointless war against Iran.
Ultimately, what is holding Trumpism back ? A few honest federal judges, a handful of free newspapers and news agencies, two or three late-night show clowns, and — first of all, very first of all — bond market rates. In other words : the wall of money, i.e the reality principle.