Commonwealth Bank of Australia FX strategist Carol Kong said U.S. public debt
interest payments rose 15% to $1.17 trillion in the fiscal year through July,
partly due to higher U.S. Treasury yields. She said the Trump administration
appears unwilling to pursue substantive fiscal consolidation. CBA expects
continued upward pressure on long-term U.S. Treasury yields, which would raise
government borrowing costs and expand public debt. Kong warned this could create
a feedback loop in which rising debt and servicing costs push investors to
demand higher yields, further increasing financing costs and aggravating debt
pressure.
