FT: Economic Pressure During Trump Era, Oil Price and Mortgage Rates Rise in Tandem, U.S. Debt Surpasses $40 Trillion

BlockBeats News, August 22 - An article in the Financial Times stated that the Trump administration's economic policy is facing multiple pressures: the U.S. federal debt has surpassed $40 trillion, the long-term U.S. bond yield has risen to a 19-year high, the Iran war has pushed up energy prices, and mortgage rates continue to climb.

This week, the U.S. long-term bond market experienced intense volatility. Investors, concerned about the government's expanding borrowing scale and inflation risks from the war, have driven up long-term U.S. bond yields. U.S. Treasury Secretary Besent subsequently announced an expansion of the long-term bond repurchase plan and plans to implement measures to reduce the fiscal deficit. However, the market response has been limited, and the U.S. dollar has instead weakened.

Data shows that the size of the U.S. government debt has exceeded $40 trillion for the first time this week, with federal spending growth at its fastest pace since the pandemic. In the 2025 fiscal year, the U.S. fiscal deficit as a percentage of GDP is only slightly down to 5.8%, and Trump's tax cut policy is expected to further increase fiscal pressure in the future.

In terms of energy, the U.S.-Iran conflict has driven up U.S. fuel prices. Gasoline prices have risen by about 40% since the outbreak of the war, reaching $4.11 per gallon; diesel prices have risen to $5.58 per gallon. The increase in energy costs has weakened Trump's previous policy goal of reducing the cost of living and energy prices.

The housing market is also under pressure, with U.S. 30-year mortgage rates rising to 6.65%, higher than the 5.98% before the war broke out. Meanwhile, U.S. consumer inflation in May once rose to a three-year high of 4.2%, falling to 3.4% in July, but Federal Reserve officials remain concerned about sustained inflationary pressure.

Despite the U.S. economy still being supported by consumer spending and large-scale tech companies' AI infrastructure investment, the growth rate is below the government's previous targets. In the second quarter of 2026, the U.S. GDP's annualized growth rate is about 1.5%, lower than the previously proposed expectation of over 3% growth.

Market participants believe that high debt, high financing costs, and rising energy prices are eroding consumer confidence and may be significant political pressures faced by the Trump administration. Besent, however, stated that the U.S. still hopes to improve its fiscal situation through economic growth.