**US Debt Tilts Toward T-Bills**

After 30-year Treasury yields rose above 5% in May 2026, **more than 75%** of the increase in marketable Treasury debt since July came from T-bills. That compares with **18% in 2025**.

The US now has a record **$7.25 trillion** in T-bills outstanding. They mature within a year and must be constantly refinanced. Yields are already around **3.8%-4%**, while another **25 bps Fed hike** is expected on Wednesday.

BofA expects **3 25 bps hikes** this year, which could add **over $50 billion** in annual interest costs once the debt is fully rolled over. The Treasury avoided more expensive long-term borrowing by using short-term debt. Now that **short-term funding is getting more expensive** too.

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