The Committee for a Responsible Federal Budget warned that the United States is entering a debt spiral because interest rates on newly issued Treasuries are running above expected economic growth. The group said rates on new Treasury bonds and notes are around 5%, compared with medium-term nominal economic growth expected to be closer to 4%. It warned that the imbalance could contribute to a fiscal crisis involving higher unemployment, falling asset values and surging inflation. Treasury Secretary Scott Bessent said the United States could grow its way out of the problem if annual growth reaches 3%, arguing that the country has a spending problem rather than a revenue problem. Yardeni Research founder Ed Yardeni said bond vigilantes (investors who pressure governments through bond sales) pushed yields above nominal GDP in the 1980s but have not done so so far. He said that could change if the Federal Reserve fails to subdue inflation, while identifying a booming U.S. economy as the main reason yields have risen sharply. The 10-year Treasury yield recently closed at 5.11%, its highest level since 2007. Economists also pointed to AI investment as a force supporting growth and competing for capital. UBS Group economist Jonathan Pingle described AI investment spreading into other sectors as extensive and surprising. Rockefeller International Chairman Ruchir Sharma warned that an AI bubble could pop if the 10-year yield decisively exceeds 5%, ushering in a new era of tighter money. Oaktree Capital Management co-founder Howard Marks said projected global AI data-center investment of more than $5 trillion could compete with federal borrowing and push interest rates higher.