US Government Borrowing Costs Reach Highest Level Since 2007
The US government's borrowing costs have reached their highest level since the global financial crisis, driven by concerns that an Iran war could force the Federal Reserve to raise interest rates. The yield on 30-year US Treasury bonds climbed to 5.23% in July 2026 — a 19-year high — following the Fed's decision to keep rates unchanged but with internal divisions among policymakers. The increase comes amid global pressure on bond yields, exacerbated by rising oil prices and inflation risks. Three members of the Federal Open Market Committee had favored raising interest rates at this meeting. The potential for higher borrowing costs adds strain to a US national debt nearing $40 trillion, which is expected to grow further due to tax cuts under Donald Trump's One Big Beautiful Bill Act. New Fed Chair Kevin Warsh did not provide clear guidance on future rate moves but hinted that action could come between September and December. Market expectations now give a 67% chance of a rate hike at the next meeting in September.
Topics: Borrowing Costs Federal Reserve Inflation Iran War Treasury Bonds