Washington’s credit line is getting one hell of a workout. The IMF expects the US budget deficit to reach 7.5% of GDP in 2026 and stay around that level through 2030, putting America well above other Group of Seven borrowers. As the government leans harder on debt markets, the cost is showing up in mortgages, car loans, and corporate financing.
- The US 10-year Treasury yield hit 4.8%, while Mark Fleming of First American expects the Treasury selloff to push mortgage rates “much closer to 7%.”
- JPMorgan Chase CEO Jamie Dimon said America must remain the “pre-eminent economy” as G20 allies pushed back on tariffs and Iran policy.
The growth cushion: America’s biggest advantage is that its economy is still growing faster than its peers, with AI investment and resilient consumer spending doing much of the heavy lifting. Scott Bessent leaned into that strength at the G20, calling the US the “A.I. superpower” even as allies pushed back on tariffs and other US policies. If borrowing costs stay high, that advantage could start to narrow if consumers pull back or the AI-led stock rally loses momentum.