With the federal deficit near 6% of GDP and the national debt over $40tn, America’s fiscal position looks increasingly precarious

• Bessent ‘will lose’ battle with bond markets, ex-mentor warns

Are we seeing the first signs of panic in Donald Trump’s Treasury? The US is by far the world’s biggest debtor, and the steady rise in global long-term interest rates – which I have long argued was inevitable – is starting to cause real pain.

Until now, the Treasury secretary, Scott Bessent, has dismissed concerns about US debt, which recently surpassed $40tn, as a big nothingburger. Growth, in his telling, will be so spectacular the US will easily be able to meet its interest obligations without any significant tax rises or spending cuts, while the rest of the world will happily keep feeding it money. But if Bessent really believes that, why is he trying to strong-arm the bond market by fiddling with the maturity structure of government debt?

As yields are dragged higher in the UK, Europe and Japan, the impact for consumers and businesses will be far-reaching

• ‘Starve the beast’? The $40tn cost of Republicans’ false promises to cut spending

Government borrowing costs around the world have surged to the highest levels in decades amid growing fears over US bond market turmoil.

Anxiety about Donald Trump’s handling of the US economy, and concern that the US president’s war with Iran is driving up inflation, are causing a sell-off in the US bond market.