The floor fell out. I stood in the middle of the exchange floor yesterday, November 12, as the October Consumer Price Index (CPI) print hit the wires, and the collective intake of breath was audible. For years, we treated the federal debt like a theoretical physics problem. Today, with the national debt officially crossing the $36.2 trillion threshold, it is a mathematical trap. The stopgap spending measure signed yesterday morning does not solve the crisis; it merely finances the interest on our previous failures.
The Ghost of 2019 Versus the Reality of 2025
In 2019, the 35-day shutdown was a political theater piece about a wall. In 2025, the stakes are existential. When former President Trump signed that record-breaking bill years ago, the 10-year Treasury yield sat comfortably near 2.7 percent. As of this morning, November 13, 2025, we are staring down a 10-year yield hovering at 4.82 percent. The cost of servicing this debt has now surpassed the entire annual defense budget for the first time in American history. We are no longer debating policy; we are debating solvency.
I spoke with two primary dealers this morning who confirmed that the Treasury’s latest auction of 10-year notes saw the weakest demand since the 2023 regional banking scare. Investors are demanding a massive risk premium to hold American paper. The bill signed this week avoids a total government paralysis, but it does so by authorizing another $450 billion in short-term borrowing that the market is struggling to absorb.
Breaking Down the October CPI Shock
Yesterday’s Bureau of Labor Statistics report confirmed what many of us feared: Core inflation is proving to be a structural beast rather than a cyclical one. The 0.3 percent monthly increase in core prices means the Federal Reserve is effectively boxed in. They cannot cut rates to ease the Treasury’s borrowing costs without reigniting the inflationary fire that has already gutted middle-class purchasing power by 22 percent since 2021.
The technical mechanism of the current fiscal friction is a “liquidity vacuum.” As the Treasury issues record amounts of new debt to cover the spending bill signed this week, it sucks liquidity out of the private sector. This isn’t just a budget dispute; it is a direct drain on the capital available for small business loans and mortgages. I tracked a 14-basis-point jump in the 30-year fixed mortgage rate in the three hours following the bill’s announcement. The government stayed open, but the housing market just got more expensive.
The Cost of Temporary Stability
The spending bill provides a bridge, but the bridge is made of cardboard. We are looking at a fiscal architecture that requires $1.2 trillion in new debt every six months just to maintain the status quo. The market’s reaction has been one of exhausted skepticism. Gold prices hit $2,740 an ounce in London trading this morning, a clear signal that the world’s largest funds are looking for exits from fiat-denominated stability.
A Comparative Look at Fiscal Volatility
To understand the gravity of our current position, we must look at how the fundamental metrics have shifted since the last major budget crisis. The table below outlines the deterioration of our fiscal cushion.
| Metric | 2019 Shutdown Period | November 13, 2025 |
|---|---|---|
| Total National Debt | $22 Trillion | $36.2 Trillion |
| 10-Year Treasury Yield | 2.71% | 4.82% |
| Interest as % of Tax Revenue | ~8.5% | ~21.4% |
| Average Mortgage Rate (30Y) | 4.45% | 7.85% |
The leverage is the lead story. In 2019, the U.S. had the luxury of time and low rates. Today, we are paying more in interest than we are on the entire Department of Veterans Affairs, the Department of Education, and the Department of Transportation combined. When I asked a senior analyst at Reuters Finance about the “rebound” the bill was supposed to trigger, he laughed. There is no rebound when the price of the fix is more debt at higher rates.
The spending bill includes a provision for another “Debt Commission,” a phrase that has become synonymous with political procrastination. However, the bond vigilantes are no longer waiting for commissions. They are selling. The spread between the 2-year and 10-year Treasury notes remains stubbornly narrow, signaling that the smart money expects a growth slowdown as the weight of these interest payments begins to crush private investment.
We are entering a phase of the fiscal cycle where the math takes over. For thirty years, we operated under the assumption that the world would always have an infinite appetite for U.S. dollars. That assumption died this week. As the Treasury prepares for its next massive refunding announcement, the focus will not be on whether the government stays open, but on who is left to buy the debt that keeps the lights on. Watch the Treasury’s 20-year bond auction on November 19, 2025. If the bid-to-cover ratio falls below 2.3, the temporary peace of this spending bill will vanish before the ink is dry.
