Can the US Defy Fiscal Gravity?

The US faces mounting fiscal pressures as long-term Treasury yields and real rates reach 25-year highs, driven primarily by structural deficits above 6% of GDP and rising debt-to-GDP ratios rather than inflation alone. While the dollar's safe-haven status provides temporary relief, experts warn that America's unsustainable fiscal trajectory could eventually force market discipline despite its current "exorbitant privilege." Policymakers must confront the challenge of funding growing deficits domestically as foreign demand for US debt becomes less reliable.