Will Trump's massive national debt finally become a problem?

Investor jitters over the ballooning US national debt are surfacing, with interest rates on long-term Treasury bonds climbing to 5.2 percent, the highest since 2004. This surge directly influences rates for mortgages and other loans, making it a critical issue for American households and a politically charged topic just two months before the congressional elections.

Adding to the economic unease, American voters are already grappling with high inflation. This discontent is exacerbated by the perception that the US attack on Iran has significantly increased gasoline prices. These economic pressures are creating a challenging environment for Republicans, as voters express dissatisfaction with the current administration's economic policies and the rising cost of living.

In an attempt to counter the rising interest rates, the Treasury Department announced a new intervention. Starting September 9, the department will begin purchasing long-term US Treasury bonds, initially injecting $4 billion into the market. The strategy aims to increase the price of these bonds, which in turn will lower their effective yield, or interest rate.

However, the effectiveness of this intervention remains uncertain. Analysts question whether the proposed $4 billion, and potentially larger sums, will be sufficient to influence the vast US bond market, which trades trillions of dollars in government and corporate debt. The market's reaction will depend on whether it is intimidated by the government's actions or if the underlying trend of rising interest rates proves too strong to reverse with such measures.