It is the retribution tale of the mid-2020s. The Federal Reserve’s measure of 10-year real rates was pinned to the floor over the post-Lehman decade. It was negative five years ago. It has been closer to 2 per cent since Covid violently reset the rules of the international financial system. This jump has played particular havoc with the US debt trajectory. The Bank of America has pencilled in deficits of $US2 trillion ($3.1 trillion) this fiscal year, $US2.2 trillion in 2026, and $US2.3 trillion in 2027, even if all goes well. Money raised from tariffs – $US300 billion at best, assuming there is no retaliation or offsetting damage – does not even slow the fiscal degradation. These are gargantuan demands on global capital markets. The US treasury must refinance $US7 trillion of debt this year alone. “How did you go bankrupt?” goes the immortal line from Ernest Hemingway: “Two ways. Gradually, then suddenly.”