U.S. debt exceeds $39T and the government is borrowing $155B/month; interest payments are $24B/week and accelerating. Rising debt supply and higher interest costs increase the risk of higher long-term yields, which directly lowers bond prices (TLT is a long-duration Treasury ETF). The trajectory of fiscal deficits and interest expense suggests upward pressure on yields, making a short position in TLT a bet on rising rates. Fed pivot to rate cuts, safe-haven demand during a recession, or fiscal consolidation could reverse the trend.
U.S. debt exceeds $39T and the government is borrowing $155B/month; interest payments are $24B/week and accelerating. Rising debt supply and higher interest costs increase the risk of higher long-term yields, which directly lowers bond prices (TLT is a long-duration Treasury ETF). The trajectory of fiscal deficits and interest expense suggests upward pressure on yields, making a short position in TLT a bet on rising rates. Fed pivot to rate cuts, safe-haven demand during a recession, or fiscal consolidation could reverse the trend.