US bond yields top 5% for the first time since 2007 as debt hits $40 trillion
The sell-off in American government debt is already being felt in South Africa, where the Reserve Bank decides on interest rates next week.
Yields on United States government bonds have pushed above 5% for the first time since 2007, as investors demand better terms to lend money to a government that now carries $40 trillion in debt.
The number was the subject of eNCA’s Number of the Day segment on 16 September, which put the figure at 5% and worked through what it means for savers, for the rand and for the Reserve Bank’s next move.
The mechanics are worth understanding, because they reach ordinary South Africans through the petrol price, the grocery basket and the home loan repayment.
What a bond is, and why the price is falling
When a government needs cash, it borrows it by issuing bonds. The buyer hands over money and the government agrees to pay it back later, with interest. American Treasury notes, the 10-year instruments at the centre of this move, are the benchmark safe asset in global finance.
Bonds can then be sold on to other investors. What is happening now is that the price of those bonds is falling on that secondary market, and the yield, which is the return an investor gets, is rising in step. Investors are saying they will lend, but only on better terms.
That matters because the US government has to keep issuing new debt. If buyers want more interest, the cost of that borrowing climbs.
Why investors want more
The Federal Reserve is expected to raise interest rates, South African time, in the early hours of Thursday morning. When rates rise, savers have more places to put their money, so bonds have to compete harder to attract it.
There is a second force at work, which the segment called the risk premium. A government bond is a bet that the government will pay you back. The United States has long been treated as the borrower that never defaults, which is why its yields have historically been low. That assumption is being tested. Investors are looking at the $40 trillion debt pile, and at a White House using sanctions and tariffs as financial instruments, and pricing in more risk than before.
The Netherlands moved its gold reserves out of North America, a decision the segment cited as a signal of that shift. Money is diversifying away from the United States, and the dollar’s status as the default safe haven is no longer automatic.
The war, the fuel price, the rate
There is a chain running from the conflict between the US and Israel and Iran, which pushed oil prices up. Higher fuel prices feed inflation. Central banks then raise interest rates to pull inflation back down. Higher rates push bond yields up.
That chain is why this is not simply an American story.
What it costs a South African household
South Africa competes for the same global capital as the United States. This country is seen as the riskier borrower, and it pays for that with higher interest rates, which is what makes its bonds attractive in the first place.
If American rates rise, that relative advantage narrows. Money can move back to the US, and the rand takes the strain. A weaker rand makes imported fuel and food more expensive, and that is the cost that arrives first for a household in Soweto or Gqeberha.
The pressure then lands on the Reserve Bank. If it follows the US higher, debt becomes more expensive for everyone carrying a bond, a car repayment or a credit card balance.
There is some relief in the data. Long-term inflation is looking better, and the expectation discussed on the segment is that the Reserve Bank may hold rates steady rather than raise them.
That decision is due next week. It is the date to watch, because it decides what the next twelve months cost for every South African with a loan.
Source: eNCA (YouTube), Number of the Day | 5 | 16 September 2026, https://www.youtube.com/watch?v=CsLtJlycOzU
