US debt risk surges, shifting to short-term treasury bonds to meet growing demand for borrowing

Comparatively, the US Treasury's dependence on short-term debt is rising: US Treasury notes currently account for 21% of the tradable treasury securities market, which is close to the highest level since 2020. At that time, the US federal government's borrowing volume surged during the response to the pandemic. This figure is well above the 10-15% range observed between 2012 and 2019. In comparison, during the 2008 financial crisis, this figure reached around 34%.

Meanwhile, the US government is increasingly reliant on short-term treasury bonds to meet its growing borrowing needs rather than long-term bonds. If the US Treasury continues to issue long-term debt at the current rate until fiscal year 2027, treasury bonds will account for 25% of total debt, the highest since 2004. However, this approach increases the risk that the government faces short-term interest rate fluctuations. If interest rates continue to rise or rise again, then debt repayment costs will become more unbearable. America's debt crisis is in full swing.