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Rising US Treasury yields lift US bill financing costs, DBS says

DBS notes bills make up about a quarter of marketable debt and that refinancing at higher front-end and 10-year yields could raise Treasury interest costs.

Reported · Written up by our desk · Central Banks

DBS Group Research economist Eugene Leow said rapidly rising US Treasury yields are making it harder for the US government to finance itself as the Federal Reserve continues to hike rates, according to an FXStreet analysis.

Leow pointed to the government’s growing reliance on short-term bills, which are now around a quarter of marketable debt, and warned that refinancing at higher front-end and 10-year yields could significantly increase interest costs for the US Treasury.

The analysis also frames the issue in the context of the US fiscal outlook, citing sticky spending pressures tied to Social Security and Medicare, declining corporate tax revenues, and a shortfall from tariff collections.

FXStreet presented the view as part of its insights selection, highlighting that the yield-driven rise in financing costs could add strain to US fiscal conditions.

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