The U.S. national debt just crossed $40 trillion, and the bond market blinked. 

Investors are now demanding higher interest rates to lend America money, pushing Treasury yields to levels we haven’t seen since 2007. That matters because those rates help drive mortgages, credit cards, car loans and the cost of borrowing across the economy. 

In this week’s Market Alert, we explain why this could put even more pressure on an already stretched consumer, and why having a defense built into your retirement plan matters. 

Usually we talk about what’s going on in the stock market, but right now, it’s the bond market that is the story. 

• Usually we talk about what’s going on in the stock market, but right now, it’s the bond market that is the story. 

• We just hit $40 trillion in national debt for the first time in history. Ten years ago, it was $20 trillion, so it has doubled in just 10 years. 

• That works out to $117,000 of debt for every single American, and our government is adding $7 billion in debt every single day. 

• Here’s the one that’s really crazy: the national debt is now equal to almost 85% of all the retirement savings in the United States. 

• The United States is the world’s reserve currency. Think of the U.S. Treasury as the world’s bank account, the place where countries all over the world park their cash. 

• Once we crossed that $40 trillion threshold, it’s kind of like the world suddenly stopped and said, “Whoa, whoa. Do we want to continue to lend to the Americans?” 

• And what they demanded was a higher interest rate to do that, meaning they view us as a little bit higher risk. 

• The interest rate went up to 5.34%, the highest level since 2007. 

• Why do you care? Because Treasuries set the price for nearly everything: mortgages, car loans, credit cards and the government’s own interest bill. 

• The government is now paying $1.2 trillion a year just in interest on the debt. That’s not paying it down. That’s just interest. 

• And here’s what’s making it even worse: AI companies are borrowing money like crazy to build all these data centers. 

• Companies that used to be sitting on piles of cash are now competing with the U.S. government for hundreds of billions of dollars. 

• That’s forcing the Treasury to pay higher interest rates, which feeds back into higher mortgage rates, credit cards and car loans. 

• Treasury Secretary Scott Bessent tried to calm things down by doubling bond buybacks. It worked a little bit, but not much. 

• Basically, the bond market said, “Eh, eh, eh, you’re not fooling me. We know there’s $40 trillion of debt there, and it’s getting worse.” 

• I’m not trying to depress anybody, but I’m of no value to you if I don’t tell it like it is. 

• The world is still willing to finance our debt, but we saw a hiccup when we crossed $40 trillion. The world took a moment and said, “Ooh, we want a little more interest rate now.” 

• The second story is the consumer, and what we talked about last week got even worse. 

• Walmart’s own CFO said the consumer is “stretched thin.” They’re cutting back under the strain of high gas and food prices. 

• Walmart’s sales grew by only 2.6%, well short of what was expected. 

• We’re still seeing that K-shaped economy. The wealthier people are spending because the stock market is at all-time highs and they’re feeling rich, but the average consumer is getting squeezed by gas and groceries and pulling back. 

• That matters because the consumer is two-thirds of our economy. If they stop spending or feel squeezed, that could hurt the rest of the economy. 

• And now Kevin Warsh, the new Fed chairman, is walking a tightrope. 

• Inflation is stuck at 3.4%, well above their target. Inflation is too high to cut rates, but the economy is obviously slowing down and you don’t want to raise them either. 

• He’s kind of between a rock and a hard place. 

• So what does this all mean to us? 

• I’m not predicting that the AI bubble is going to burst and cause all kinds of havoc. We’re not predicting that people will stop having faith in the U.S. dollar. 

• But there are some dark clouds there that we need to be aware of. 

• That’s why we believe in having a process to look at what’s going on and, if there’s a threat that we think could cause you to experience catastrophic losses, take evasive action. 

• You can count on us. We’re going to mind the store for you so that you don’t have to. 

• If we hit our signal point, we’re going to get out and protect you to the extent that we feel it’s appropriate. 

• I don’t want you to worry about this. I’m just telling you what’s going on so you’re informed. 

• Rest assured that we’re the ones getting the gray hair so that you don’t have to. 

Transcript:

Hello, everyone, and welcome back to our weekly market alert video for today, which is August 28th, 2026. My, my, the year is going by. We have a ton to talk about, not the… And, and I don’t know if there’s good news this week. I wish there was. Although I do have some good news I’ll share with you in a minute.

Um, we just hit $40 trillion in debt. We crossed over the $40 trillion debt number, and, uh, we’re gonna go over, you know, what that means because the bond market didn’t like it. Investors around the world are getting a little tense, a little, uh, nervous and, uh, interest rates went up on all the things that hurt consumers.

We have the AI people that are competing for dollars. Woo, we have a lot to talk about. And then the Federal Reserve chairman, uh, Alan Wall, Kevin Warsh, uh, basically said that he doesn’t believe in telling us what’s gonna happen. Okay? Uh, so he just thinks that everybody should figure it out on their own.

It’s not the Fed’s job to predict, forecast, or even tell you anything other than, “This is what we’re doing.” Uh, and he wants the market to figure it out. So, um, we have all of that going on. We have a lot to talk about. And, uh, I just wanna make an announcement so I don’t forget, because I will if I don’t. Um, and that is, uh, the RPO, our, our third Thursday webinar series, um, September 17, is on estate planning essentials, and, uh, it’s, uh, amazing.

We’ve had tons and tons of people sign up, so if you’re interested in making sure you have all your ducks in a row, your estate planning for your greedy, unwashed, undeserving heirs, um, then make sure you sign up for that. Uh, talk to your retirement planner and, uh, uh, we’ll help you to get signed up if you don’t know how to do it.

Okay? We want you there. Uh, it’ll be at 6:00 PM Central Time, and it’s about an hour. Okay? So we’ll look forward to having you there. All right, so I can get rid of this one. Okay, so I don’t like too many papers on my t- on my desk. So, uh, before we get going, um- My youngest daughter is going to be, uh, getting married here, um, on the 19th of September, and, uh, which is wonderful and great, but there is kind of a, uh, a depressing factor that comes into play, and that is that all the big bills are coming due now.

You know, it’s like all these deposits, “Oh, you put $5,000 down. Don’t worry about it.” And then all of a sudden you get the $15,000 bill. Oh, my gosh, flowers. What? You know what I’ve discovered, Alex, is, like, if you put wedding after anything- Mm … it triples the price. Oh, yeah. Or, or before. So, so wedding flowers- … are triple normal flowers, right?

Wedding cake. Oh, yeah. Wedding dress. Wedding anything. You put the word wedding and boom. It’s amazing. Marketing, that’s what it is. You know, I told, I told them, “Don’t buy wedding anything. Buy regular flowers.” Yeah. You know? “Don’t tell them this is for a wedding. We could save thousands.” So, anyway, no, I gotta…

And, and I have to write my, uh, father/daughter speech still, and I, I, I dread it because I know I’m just gonna start bawling like a… I’m, it’s, it’s very emotional. It’s my, my third and last wedding that I’m paying for, um, with my third daughter. So let’s talk about what, uh, this last week. You know, most, usually we talk about, you know, what’s going on in the stock market, and, uh, that’s kinda the big story.

But right now, it’s the bond market that is the story, and, uh, several things are conspiring. The first one is we just hit $40 trillion in our national debt for the first time in history. And the thing about it is it was $20 trillion 10 years ago, so it’s doubled in just 10 years, okay? So that’s crazy. And here’s some stats for you.

These are mind-blowing. That works out to $117,000 of debt for every single American. And not only that, our government is adding $7 billion in debt every single day. Okay? Uh, and here’s the one that’s really crazy, okay? R- are you sitting down, Alex? This, this one’s- I am. Yeah … uh, put on your seatbelt. This one’ll blow your mind.

The national debt is now equal to almost 85% of all the retirement savings in the United States. So you take everything every American has saved up in their 401s, all the, everything, all… You put it all together, the national debt is now 85% of that. It’s, it’s a massive thing. Wow. And the, the thing about it that, that makes this, uh, I’ll say dangerous, is that we are, the United States, the, the, the, the dollar, the world’s reserve currency.

Okay, so what does that even mean? The world’s reserve currency means that we are the world’s, uh, bank account. We’re their savings account. It’s where they put their, their, uh, uh, emergency fund. You know, they want a place where they can park their cash. And countries from all over the world put their money into the US Treasury, which is the world’s bank account, the world’s savings account.

And so what happened here is once we crossed over that $40 trillion threshold, it’s kinda like the world suddenly stopped and said, “Whoa, whoa. Do we wanna continue to lend to the Americans?” And what they demanded was a higher interest rate to do that, meaning they view us as a little bit higher risk. And the interest rate went up to 5.34%, which is the highest level since 2007, okay?

So it’s almost 20 years we haven’t seen the Treasury interest rate that high. And so, and what was happening in 2007, right? Some of you may remember, we had a credit crisis- Yeah … in 2008 and ‘7. So why does this, why do you care? Well, because Treasuries set the price for nearly everything, mortgages, car loans, credit cards, um, and the government’s own interest bill, right?

Because these higher interest rates mean that they’re getting– We’re, we’re borrowing money from foreigners and domestic lenders, and we’re paying, the, the government is paying a much higher interest rate. And so our interest that we pay every year now is $1.2 trillion. This year, we’re gonna spend… That’s just interest on the debt.

That’s not paying it down. That’s just interest. And that now is the single biggest line on the federal budget except for Social Security and Medicare. Risen to third place, on its way to number one, which is not good. Now, here’s what’s making it even worse, okay? And, uh, you know, we’ve been talking about how AI and all these big companies are, that used to be just, you know, sitting on piles of cash, are now borrowing money like crazy so as to build all these data centers.

So these companies like Microsoft and all the rest of them that had hundreds of billions of dollars in cash, well, they’re borrowing money like crazy, and they’re competing with the government. So, you know, investors are saying, “Who do I wanna le– Who do I wanna lend money to, so I can get interest on, on my bonds?”

Well, now the US government is actually competing with these AI companies, and they’re borrowing hundreds of billions. So they’re borrowing almost like on the same level as the US is. You know, it’s like it’s crazy. And so that’s forcing the Treasury to have to pay higher interest rates, which feed back into higher mortgage rates, higher credit, credit cards and car loans, et cetera, et cetera.

So last week, Scott, uh, uh, Bessent, our Treasury Secretary, uh, tried to calm things down by doubling their bond buybacks, right? So in other words, they’re taking bonds out off the shelf, off the market, and therefore making them more attractive because there’s a smaller supply, which should drop the interest rate.

Well, it worked a little bit, but not much. Basically, the bond market said, “Eh, eh, eh, you’re not fooling me. We know there’s $40 trillion of debt there, and it’s getting worse.” So we have that. And again, you know, I’m not trying to depress anybody, but I’m of no value to you if I don’t tell it like it is. So here’s where the, the scary part comes in We are the world’s reserve currency.

The world is willing to finance our debt, to essentially lend us the money, because when they lend us the money, they’re basically parking their money in the US, right? In our savings, in the U- the, the, the Treasury. If they wake up one day and they say, “You know what? America is no longer safe. It’s no longer stable,” you know, politically or whatever, and, uh, lending the Americans money is not a good idea anymore, then what happens there is Katie bar the door, because we cannot afford our debt.

We are literally without get- we’re borrowing money to pay the loans that we already have. I mean, that… think about what that means, right? So we’re multiplying, we’re accelerating how fast our debt is growing, and if they aren’t willing to give us the money to do that, then essentially we are bankrupt. I mean, we’re bankrupt.

Uh, and so that’s, uh, that’s concerning, and we saw a hiccup there when we crossed that 40 trillion where the world took a moment and said, “Ooh We want a little more interest rate now. So they’re perceiving us to be a higher risk, not to the point where they’re not willing to put money here, but, you know, if we keep going the way we are, we could.

So the second story that I wanna talk with you about today is the consumer. And, you know, last week, we talked about how, uh, Walmart and, uh, the big, uh, the big retailers were s- were seeing the, the consumer get pinched. Well, it got even worse. Walmart’s own CFO, the chief financial officer, he said that the consumer is stretched thin.

They’re cutting back under the strain of high, uh, gas, food prices. Uh, th- Walmart stock went down. Uh, uh, their, their, their, uh, sales only grew by 2.6%, which was well short of what was expected. So Walmart, where, you know, our consumers, the vast majority shop, they’re experiencing trouble. And you know, last week, we also talked about the K-shaped eco- uh, economy, right?

So if you picture the K, this is the rich people, and this is the poor people , okay? The poor– The rich people are spending more because their stock market is at all-time highs. They’re feeling rich. They got money. They’re spending. So the up part of the K is still spending. But the important one is the, the downside, right, the, the, uh, average consumer.

And, uh, they’re getting squeezed by gas, their groceries, you know, and they’re pulling back. Uh, and that matters because they are two-thirds of our economy, and if they stop spending or if they feel squeezed, you know, that could he- hurt the rest of the economy. So who is the chief financial officer for our whole economy?

Well, that’s, uh, uh, Kevin Warsh, right? He’s the new Fed chairman, and so he’s now got this problem . Welcome, Kevin . So, uh, he’s gonna give a big speech, and as we record this, I have not heard the speech. We, we recorded early before he did. Uh, but he’s got inflation stuck at 3.4%, well above their target. Um, he’s walking a tightrope because inflation’s too high to cut, but the economy is obviously slowing down, and you don’t wanna, you don’t wanna raise.

So he’s kinda between a rock and a hard place. It’s gonna be very interesting to see how he deals with it. So in sum, what does this all mean to us? Well You know, I’m not predicting that the AI bubble, which we think there is one, is gonna burst and cause all kinds of havoc. We’re not predicting that we will not be the, uh, world’s reserve currency, that people will stop having faith in the US dollar.

But there are some gray, uh, some, some dark clouds there that we need to be aware of. And so that’s why, you know, we always believe that we should have, you know, a process by which we look at what’s going on, and if it’s a threat to your retirement, if there’s a threat there that we think could cause you to experience catastrophic losses, then we’re gonna take evasive action.

You know, you can count on us. We’re gonna mou- mind the store for you so that you don’t have to. And, uh, if we hit our, our, our signal point, then we are gonna, you know, we’re gonna get out and protect you to the extent that it’s, that we feel it’s appropriate. So I don’t want you to worry about this, okay?

I’m just telling you what’s going on so you’re informed. But rest assured that we’re the ones getting the gray hair so that you don’t have to. Your job is to go out and be a squipper, right? Enjoy your second childhood without parental supervision, and let us, uh, worry about all this stuff for you so that you don’t have to.

And so I hope you are. And, uh, it’s the summer months right now, so I hope you’re enjoying the summer with your family and with everybody. Uh, with… If you’re playing golf or tennis or traveling, whatever it is you’re doing, I hope it’s just wonderful for you and that all is well. So that’s our, uh, Weekly Market Alert, uh, for this week.

I wish I had great news for you, but I just don’t. And, uh, like I said, I’m a, I’m of no value to you if I just, if I don’t tell it like it is. So thanks for watching. Again, I hope this finds you healthy, wealthy, and wise. Make sure you share these videos with your friends and family and business associates.

You know, we want them to know about us, and better yet, send them our way. We would love to visit with them and see if we can help them. All right? So thank you, and we’ll talk soon. Retirement Planners of America

Economic indicators and stock market performance cannot be predicted. Opinions expressed regarding the economy and the stock market belong solely to employees of RPOA on behalf of Retirement Planners of America and may not accurately portray actual future performance of the economy or stock market outcomes. Opinions expressed in this video is intended to be for informational purposes only and is not intended to be used as investment advice for individuals who are not clients of Retirement Planners of America. All content provided is the opinion of employees of RPOA Advisors, Inc. (d/b/a Retirement Planners of America ) (“Retirement Planners of America”, “RPOA”). ©Copyright 2026