Washington's finances are deteriorating while the government weighs more war spending — bad for taxpayers, bond buyers, and anyone hoping rates come down soon.

• The federal deficit is closing in on $2 trillion and total debt is near $40 trillion, roughly $118,000 per American, with no plan to change course.
• Government bond yields sit at 24-year highs, which keeps borrowing expensive for everyone despite official reassurance that rates will ease.
• The Pentagon has drawn up plans for three days of strikes on Iran, though Trump has repeatedly blocked restarting the war and says he will hold off until after the midterms.
• Senators are being denied access to damaged US bases in the region, raising questions about where war money went after a reported loss of 81 planes and $3.3 billion.
• The Navy and Shield AI committed $400 million to the XBAT drone program, while SpaceX is borrowing heavily to buy Nvidia chips and buying spectrum to become a wireless carrier — and Trump personally bought SpaceX debt and up to $25 million in Meta.

Outlook: Watch whether OpenAI's revenue shortfall — closer to $50 billion than the $70 billion floated — starts denting confidence in the AI trade while debt costs stay high.