US borrowing costs hit highest level since 2007

September 15, 2026

US government borrowing costs have reached their highest point in nearly two decades, with the 10-year Treasury yield climbing to 5. 04% before moderating slightly. The increase stems from multiple factors including surging oil prices driven by the US-Israel-Iran conflict, which have jumped from $86 to over $109 per barrel since late August and sparked inflation concerns.

Who is affected

US government and taxpayers (facing higher borrowing costs)
Treasury Secretary Scott Bessent
Federal Reserve Chair Kevin Warsh
President Donald Trump
Bond investors globally
Technology/AI firms borrowing for data centers
Saudi Arabia (export capacity concerns)
BMO Wealth Management and its clients

What action is being taken

The US Treasury is buying back bonds to drive down Treasury yields
Oil prices are rising (currently over $109 per barrel)
Tech giants are borrowing cash to build data centers
Bond yields are increasing globally

Why it matters

Rising government borrowing costs directly increase the expense of financing US debt, affecting taxpayers and the federal budget. The surge reflects multiple economic pressures including geopolitical instability, energy market volatility, and inflation concerns that could force the Federal Reserve to raise interest rates despite presidential opposition. Higher yields also signal reduced investor confidence in government finances and create broader economic ripple effects through increased borrowing costs across financial markets.

What's next

No explicit next steps stated in the article

Read full article from source: BBC