Business
US Debt Surpasses $40 Trillion as Treasury Expands Bond Buybacks
The US national debt has surpassed $40 trillion for the first time, while the Treasury has doubled the size of some government bond buybacks in an attempt to calm a market unsettled by rising borrowing costs.
Treasury data showed that total federal debt reached a record $40 trillion on Tuesday. About $32.27 trillion is held by the public, while $7.78 trillion is owed through government accounts.
The milestone came much sooner than previously expected. The Congressional Budget Office had projected in 2023 that US debt would not reach $40 trillion until 2028. The total reached $39 trillion in March and $38 trillion in October last year.
The Treasury has borrowed about $1.8 trillion during the first 10 months of the current fiscal year, already exceeding the amount borrowed during the entire previous fiscal year. Spending on Social Security, Medicare, defence and interest payments continues to exceed government revenues.
Against that backdrop, the Treasury announced plans to increase the size of selected debt buyback operations. Beginning September 9, the maximum size of each operation in the 10-to-20-year and 20-to-30-year sections of the bond market will rise from $2 billion to at least $4 billion.
Treasury said the increase reflected strong demand from market participants for buybacks in those maturity ranges.
The announcement followed a sharp rise in long-term borrowing costs. The yield on the 30-year Treasury bond reached its highest level since 2007 on Tuesday as investors became more cautious about buying long-dated US government debt.
The increase in yields has also been linked to a growing supply of corporate bonds, including debt raised to finance artificial intelligence data centres.
Treasury bond yields fell after the buyback announcement, with the 30-year yield dropping about nine basis points and the 10-year yield falling roughly six basis points. US stocks also moved higher.
Treasury buybacks involve the government purchasing older securities from investors with existing cash. The transactions can improve trading liquidity but do not directly reduce the overall amount of federal debt.
Some economists questioned whether the move was large enough to address the underlying problem. The Treasury market is worth about $32 trillion, making the increased buyback amount relatively small compared with the size of the market.
The growing debt burden creates a difficult cycle for policymakers. Higher debt can make investors demand greater returns to hold long-term securities, pushing yields higher. Higher yields then increase the government’s interest costs, adding to future borrowing requirements.
David Young, president of the Conference Board’s CEO Center, said the national debt affects financial decisions made by households and businesses.
The latest Treasury action may ease short-term pressure in the bond market, but it does not address the underlying increase in federal borrowing. The record debt level is therefore likely to remain a major issue for US financial markets and policymakers.
Business
Kennedy Center to Close for Repairs After Judge Blocks Trump Naming Plan
Most of Washington’s Kennedy Center will close for renovations after its board voted Tuesday to shut the landmark performing arts venue, hours after a federal judge blocked another attempt to add President Donald Trump’s name to the building.
The decision followed a ruling by US District Judge Christopher Cooper, who said the Kennedy Center board could not install a memorial to Trump or change the institution’s name without approval from Congress. The judge had previously ordered Trump’s name removed after it was added to the building’s facade.
“Simply put, Defendants cannot install memorials for President Trump or anyone or anything else at the Kennedy Center without Congress’s blessing,” Cooper wrote in his latest ruling.
Trump has said the renovation work, for which Congress has allocated $257 million, will not proceed unless the courts allow the board to move forward with plans to recognize him on the building. He said the Justice Department would appeal Cooper’s decision.
The board, which Trump chairs after replacing members with his appointees, voted to close the venue as it faces extensive repair needs and financial difficulties. Trump participated in the board’s virtual meeting, where the dispute over the institution’s future produced tense exchanges with Rep. Joyce Beatty, an Ohio Democrat and ex-officio board member who has opposed efforts to add Trump’s name.
The Kennedy Center has argued that the building requires major work. A partial ceiling collapse in a main hallway earlier this month added to concerns about the condition of the facility. Reuters reported that the closure could last as long as two years.
The dispute over the building’s name began after Trump’s return to the White House. The board first added his name to the facade, but Cooper ruled in May that the change was unlawful because Congress had established the Kennedy Center as a memorial to President John F. Kennedy. Workers removed Trump’s name in June, leaving scaffolding and a tarp covering part of the facade.
In August, the board voted to add an inscription describing the center as restored and renovated by Trump and proposed renaming the plaza outside the venue. It also considered another inscription if the Trump Kennedy Center Fund raised $100 million. Cooper’s latest ruling blocked those plans.
The court dispute has coincided with financial problems at the institution. Court filings have described declining ticket sales and contributions, while several artists and organisations have canceled performances or moved activities elsewhere. The board has argued that Trump’s involvement and fundraising are important to the center’s financial future.
The Kennedy Center, which opened in 1971, hosts major performing arts organisations and events including the annual Kennedy Center Honors. Its future now depends on the renovation process, the court appeal and decisions over how the institution will be financed and managed.
Business
Brent Crude Climbs Above $108 as Hormuz Strike and Saudi Pipeline Shutdown Raise Supply Fears
Brent crude prices climbed above $108 a barrel on Monday as growing disruption around the Strait of Hormuz raised fresh concerns about global oil supplies.
Brent crude for October and November deliveries rose by more than 3% during morning trading, extending gains from the previous week when prices moved back above the $100 mark. US West Texas Intermediate crude for October delivery also advanced, rising about 2.3% to around $102 a barrel.
The latest increase followed Saudi Arabia’s announcement that its East-West oil pipeline had been temporarily shut after drone attacks. The pipeline transports crude across Saudi Arabia to ports on the Red Sea, providing an alternative route that allows exports to bypass the Strait of Hormuz.
The closure comes as shipping through the strategic waterway faces growing risks. An unnamed merchant vessel was struck in the strait on Sunday, killing one crew member and injuring three others, according to Iranian authorities.
Shipping conditions have changed significantly since the conflict began. Vessels are required to obtain permission from Iran to pass through the waterway, while Tehran is also considering a system for charging transit service fees. Ships that do not comply have faced attacks, while US forces have carried out periodic strikes along Iran’s coastline.
Diplomatic efforts to address the situation have also suffered a setback. Oman postponed planned talks between Iran and Gulf states concerning the future of the waterway, which is one of the world’s most important routes for seaborne oil shipments.
The disruption is already affecting fuel markets beyond the Gulf. In the United States, the national average price of diesel surpassed $6 a gallon on Friday for the first time, rising from about $5.85 a week earlier and roughly 60% above the $3.71 recorded a year ago.
US petrol prices have also reached record levels, averaging about $4.22 a gallon after rising over the Labor Day weekend.
President Donald Trump has blamed Ukraine for part of the diesel supply pressure, saying Ukrainian President Volodymyr Zelenskyy should stop targeting Russian diesel infrastructure. Ukraine has attacked more than 20 Russian refinery targets this summer, while Russia responded by banning diesel exports.
According to Lipow Oil Associates, Russia’s export restrictions have removed about 800,000 barrels per day of diesel supply, while disruptions linked to the Strait of Hormuz have affected around 1.2 million barrels per day.
The broader impact on crude supplies is even greater. Oil flows through the Strait of Hormuz have fallen from about 20 million barrels per day before the war to roughly 7 million. The conflicts have also disrupted refineries representing about 5 million barrels per day of capacity, adding to pressure on global fuel markets.
Business
Google Plans €13 Billion Investment in Finland Data Centres
Google is set to invest at least €13 billion in data centres and digital infrastructure in Finland over the next two years, marking the company’s largest single investment in Europe as it expands its capacity for artificial intelligence and other digital services.
The investment will support data centres and related infrastructure in the Finnish municipalities of Hamina, Kajaani, Muhos and Vaala. Google also plans to fund clean energy projects as well as initiatives focused on biodiversity, education, research and workforce development.
The company said the decision reflects Finland’s strong position in developing energy-efficient infrastructure for artificial intelligence. The new facilities will support a range of Google services, including its Gemini chatbot.
Construction is expected to take place during 2027 and 2028. Google estimates the investment could contribute around €3.6 billion annually to Finland’s gross domestic product and support more than 37,000 jobs. About 16,000 of those positions are expected to be linked directly to construction work.
Once construction is completed, Google expects its facilities and related economic activity to support around 7,000 jobs each year. These positions are expected to include technical and facility roles, equipment suppliers and workers in nearby shops, restaurants and other services.
Finnish Prime Minister Petteri Orpo welcomed the announcement, saying the investment demonstrated the country’s strengths and could generate benefits beyond the immediate spending.
“The value of the data economy extends far beyond direct investment into spurring innovation, research and development,” Orpo said. He added that closer cooperation with Google could produce long-term benefits for both sides.
Why Finland is attracting data centres
Finland’s climate and energy supply are major factors behind its appeal to technology companies. Data centres consume large amounts of electricity and produce substantial heat, making cooling a major operational cost.
The country’s cold climate can help reduce cooling requirements, while its energy system includes nuclear power, wind and hydropower. The combination of relatively stable electricity supplies and favourable conditions for cooling has encouraged a growing number of data centre projects across Finland.
Google has maintained a presence in the country since 2009, when it acquired a former paper mill in the coastal city of Hamina and converted the site into a data centre. The company has expanded the facility over the years.
The latest investment comes as Finland faces weak economic growth and record unemployment. For Orpo’s government, attracting major technology investments has become an important economic priority.
With the country’s data economy offering prospects for investment, employment and research, Google’s announcement is expected to strengthen Finland’s position as a major European hub for digital infrastructure and artificial intelligence.
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