What happened

This week, US government debt passed USD 40 trillion for the first time, roughly double what it was ten years ago. That's the total the government owes after years of spending more than it collects in taxes. The same day, the US Treasury said it would buy back more of its own older bonds, a move meant to support prices and keep borrowing costs from rising further.

Why it matters

The US now pays over USD 1 trillion a year just in interest on this debt. The more the debt grows, and the higher interest rates go, the bigger that bill gets next year. It's a loop that's getting harder to slow down.

What it means for bonds

Investors lending money to the US government, by buying its bonds, are demanding higher returns to accept the risk. That pushed the cost of long-term US borrowing to its highest level since 2007. The Treasury's buyback helped for a single day; by the next, rates were climbing again. This isn't a sign the US will default. It does mean borrowing costs, for the government and eventually for everyone else, through mortgages and loans, are likely to stay elevated for a while.