Who will buy $9 trillion in US Treasury Bonds?

Jorge Costa Oliveira

For decades, U.S. federal governments have grown accustomed to operating with recurring budget deficits, expanding public debt from $7 trillion in 2000 to $36 trillion in 2024.

This increase occurred under both Republican and Democratic presidents and reached 117% of GDP in 2024. In 2025 alone, the federal government is expected to spend around $1 trillion just on debt servicing. Federal debt is currently growing by $1 trillion every 100 days.

If this trajectory is not reversed, the Congressional Budget Office (CBO) projects that by 2050, publicly held federal debt will hit 200% of U.S. GDP. Net interest payments would more than quadruple as a share of GDP between 2022 and 2052 – reaching 7.2% by 2052 – while primary deficits (excluding net interest payments) would rise in most years and reach 3.9% of GDP by 2052, well above the 50-year average of 1.5%.

During his campaign and in the early months of his current term, Trump pledged to balance the federal budget “in the near future” (in 2016, he had promised to do so in eight years). That was one of the stated goals for creating D.O.G.E., which in practice delivered little in spending cuts. However, in classic Orwellian Doublespeak, despite his rhetoric of “long-term budget balance” – now reliant on wishful revenue projections from tariffs – Trump is pursuing policies that will deepen the debt. The clearest example is the newly approved “Big Beautiful Bill,” which, according to CBO estimates, will increase public debt by $2.4 to $3 trillion over the next decade.

Meanwhile, in 2025, the U.S. must repay $7 trillion – $4.9 trillion in long-term Treasury securities and $2.1 trillion in short-term debt maturing this year – in addition to issuing roughly $2 trillion in new debt to finance the 2025 budget deficit.

The yield on 10-year Treasuries has climbed from 1.7% in early 2022 to 4.35% in July 2025, meaning newly issued debt this year will carry significantly higher costs.

Curiously, despite the rise in Treasury bond interest rates, the value of the U.S. dollar has declined by more than 10% since the beginning of the year. Much of this drop is due to significant sales of U.S. Treasuries by Japan (totaling $72 billion) and China ($50 billion), in retaliation for the steep tariffs imposed by the U.S. government.

Against this historical backdrop – with U.S. Treasuries no longer seen as a safe haven and the Trump administration continuing to blatantly disrespect Europe, China, and Japan – can we realistically expect the governments of these economic blocs to purchase significant tranches of new US Treasuries issuances, especially amid a weakening dollar?

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