$TAO

TAO

182.7

-3.69%

🚨 U.S. DEBT JUST CROSSED A POINT OF NO RETURN

This is not noise.

This is not politics.

This is pure math.

U.S. interest payments have now crossed a historic and dangerous threshold.

→ Q3 2025 interest payments: $981B

→ Annualized run-rate: ~$1.2 TRILLION

For context:

U.S. defense budget (2026 est.): ~$900B

America is now spending MORE on servicing debt than on its entire military.

That alone should stop you.

Here is why this matters more than people realize:

• Q1 2026 interest payments: $179B

• Q1 2025 interest payments: $160B

That is a +13% increase in just 12 months.

Interest expense is now ~19% of total federal revenue.

That means nearly 1 out of every 5 dollars collected goes straight to bondholders

before healthcare, defense, infrastructure, or social programs get funded.

By 2035, that number is projected to hit 22%.

This is not a policy issue.

This is arithmetic.

Now look at the stress signals quietly flashing red:

• Recent Treasury auctions are weakening

• August 2025 10Y auction tailed by 1.1bps (first time in 6 months)

• Bid-to-cover ratios are falling

• Primary dealers are absorbing more supply

• Real buyers are stepping back

That is demand destruction in slow motion.

And here is the real trigger nobody is talking about:

THE REFINANCING WALL

Trillions of dollars in Treasuries mature over the next 24 months.

• Average interest rate on debt today: 3.36%

• Five years ago: 1.55%

Debt is growing at ~$6.17B per day.

~$257M per hour.

As refinancing happens at higher rates, interest expense accelerates non-linearly.

From here, the Treasury only has two paths:

➤ OPTION 1: Accept higher yields

Higher yields → higher interest costs

Higher interest → larger deficits

Larger deficits → more borrowing at higher rates

This is a textbook debt spiral.

➤ OPTION 2: Yield Curve Control

The Fed monetizes debt no one wants

Currency dilution

Confidence erosion

Inflation risk returns structurally