Video: US Grapples with Debt

The United States’ debt has now exceeded US$40 trillion. The American government is beginning to take steps to restrain the rise in Treasury yields by buying back its own bonds. Why is this important? Because the higher the yield, the more expensive it is for America to pay its debt. The problem is that this is not just about bonds. It involves debt, deficits, inflation, the dollar, and the Federal Reserve’s policy. There is even potential for a conflict of interest: the Treasury wants yields to fall, while the Fed still has to keep inflation under control.