The Federal Reserve has cut interest rates multiple times since late 2024, yet long-term borrowing costs have remained elevated as bond markets no longer follow the central bank's lead.
Federal debt stood at $37.6 trillion as of September 2025, with interest payments reaching $1.2 trillion in fiscal year 2025. The Treasury issued $30.2 trillion in marketable securities that year to refinance maturing debt and cover new borrowing. When the Fed trimmed 100 basis points across three cuts by the end of 2024, the 10-year Treasury yield barely moved. By September 2025, after an additional cut, the yield remained nearly unchanged from a year earlier.
