US National Debt Reaches $40 Trillion, Sparking Inflation Concerns

US government debt hit a record $40 trillion this week, prompting analysts to warn that policymakers may attempt to inflate their way out of the borrowing burden.

Rising long-term Treasury yields, with 10-year and 30-year rates at two-decade highs, are pressuring the stock market as investors seek higher returns to offset persistent inflation.

Market experts suggest that in a fiscally dominant regime, traditional 60-40 portfolios may fail, leading to potential erosion of real purchasing power similar to the 1966-1981 period.