U.S. national debt reached $40.0332 trillion as of Aug. 20, according to the Treasury Department, pushing the 30-year Treasury yield to 5.28%, its highest level in 19 years, as the fiscal 2026 budget deficit widened to $2.1 trillion, or 6% of gross domestic product. The rate shock drove the S&P 500 down 1.4% and the Nasdaq Composite down 2.1% last week, contributed to a nearly 6% drop in South Korea’s Kospi in recent sessions and pressured stocks, bonds, real estate and gold worldwide. Falling bond prices have made fixed income less effective as a hedge for equity risk, while higher discount rates and corporate borrowing costs are challenging valuations and the long-term artificial-intelligence profit narrative. Sen. Rick Scott (R-Fla.) has separately called the debt burden unsustainable, citing roughly $3 billion in daily interest costs. A Conference Board report warned that persistent deficits could raise borrowing costs and reduce future retirement benefits. The CBO projected a $1.9 trillion fiscal 2026 deficit, while Treasury Secretary Scott Bessent said there was a very good chance the deficit had peaked. Economists and former officials have also warned about inflation and Social Security risks if fiscal pressures intensify.