This US Government Fiscal Stress Dashboard is updated by ChatGPT every weekend.
🟠 AMBER — materially worse, but still short of a sovereign-confidence crisis
This week deserves a clear ↗ deterioration marker. Long-term Treasury yields have moved close to the levels we identified as warning thresholds, and the FY2026 deficit has already reached USD 1.97 trillion with September still to come. The important counterweight is that Treasury auctions were exceptionally strong: investors are still willing to buy US government debt at these yields.
US Gross Domestic Product (GDP): $32,486.066 billion
| Indicator | Latest | Status | Status |
|---|---|---|---|
| 10-year Treasury | ~4.96%, intraday 4.9915% | 🟠→🔴 | ↑ materially worse |
| 30-year Treasury | ~5.38% | 🔴 | ↑ worse |
| Treasury auction demand | 10Y 2.71×, 30Y 2.61× | 🟢 | ↓ risk improved |
| Net interest / revenue | ~20%+ recent realised rate | 🔴 | → |
| FY deficit / GDP | ~6%+ trajectory | 🔴 | ↑ |
| US dollar | DXY ~99.1; broadly steady Friday | 🟢/🟠 | → |
| Treasuries + USD + equities all falling | No | 🟢 | → |
The biggest deterioration: long Treasury yields
The 10-year Treasury briefly reached 4.9915% on Friday, essentially touching our 5% warning threshold, before settling around 4.96%. Last week we were around 4.78%.
The 30-year has moved from roughly 5.24% to around 5.38%, reaching levels not seen since 2007.
I would therefore change the 30-year indicator from 🟠 to 🔴 RED.
However, an important qualification is that this week's acceleration is not purely fiscal. Oil above $100, stronger inflation data and expectations of another Federal Reserve rate increase have all pushed yields upward.
So I would describe this as fiscal stress being amplified by an inflation/geopolitical shock, rather than evidence that investors suddenly doubt US solvency.
This is probably the best news in the dashboard.
The September 9 auction of $39 billion of 10-year notes produced:
The bid-to-offer ratio indicates the level of competition among investors for Treasury securities by contrasting the total amount of bids received to the securities actually awarded. [More: Investopedia]
It was unusually strong demand—the auction actually cleared below the prevailing when-issued yield.
The following day's USD 22 billion 30-year auction was also strong, with a 2.61× bid-to-cover ratio, compared with a roughly 2.40 twelve-month average. Dealers were left with just 2.2%, suggesting genuine end-investor demand.
That changes an important interpretation:
That distinction is the principal reason for keeping the overall dashboard AMBER rather than RED.
The fiscal numbers worsened
Treasury's August statement shows the fiscal-year deficit at approximately USD 1.97 trillion with one month remaining. That deficit already exceeds the USD 1.775 trillion deficit for all of FY2025.
CBO's Feb 2026 baseline had projected a USD 1.9 trillion FY2026 deficit, equivalent to 5.8% of GDP, against a 50-year average deficit of 3.8%. [CBO 11 Feb 2026]
The actual FY2026 outcome will therefore exceed that original USD 1.9 trillion forecast. Therefore the deficit/GDP is assessed as 🔴 RED.
Interest expense remains a structural red signal
Through July, net interest was about USD 931 billion, against federal receipts of roughly USD 4.485 trillion—approximately 20.8% of revenue.
August data show debt-interest costs continuing to run substantially above FY2025 levels; Reuters reports year-to-date interest payments were up about 13%.
CBO's longer-term picture remains particularly uncomfortable: debt held by the public is projected at 101% of GDP in 2026, rising to 120% in 2036, with increasing interest expense being a major driver.
So this indicator remains 🔴.
Friday gave us roughly:
The S&P 500 rose about 1% Friday, Nasdaq about 1%, while DXY was approximately 99.1.
That is nowhere near our feared pattern:
Nor are Treasury auctions failing.
This continues to look primarily like inflation/rate/fiscal-supply stress, rather than investors abandoning US assets.
This week's move toward a 5% 10-year yield is increasingly significant for technology valuations.
A 5% risk-free rate makes future earnings less valuable in present-value terms and provides investors with a much more competitive alternative to expensive growth equities. Reuters noted this week that investors are explicitly focusing on the “5% question.”
AI infrastructure adds an interesting complication. Massive capital expenditure requirements increasingly require debt and equity financing. Oracle, for example, is raising roughly USD 40 billion through debt and equity this fiscal year while spending heavily on AI infrastructure.
For companies financing very large datacentre projects, long rates above 5% materially increase the hurdle rate.
Yet underlying technology earnings remain strong: Barclays raised its 2026 S&P 500 target this week, citing particularly strong technology earnings and continuing AI investment.
So I would characterize this as:
The Australian market has also begun feeling the global bond shock.
The ASX 200 fell 2.1% for the week and Australian government bond yields moved above 5%, with inflation concerns centred particularly on higher energy prices.
The AUD was around USD 0.721 late in the week.
That produces mixed consequences for an Australian investor:
The two numbers I'd highlight prominently on your website this week are:
But alongside them I'd put an equally prominent reassuring fact:
That combination captures the situation particularly well. The price America must pay to borrow has become increasingly uncomfortable; its ability to find lenders has not.
That is still 🟠 AMBER, but considerably darker amber than last week.