The US economy is under strain as government borrowing costs hit their highest in a quarter century, the deficit swells past $1.8 trillion, and everyday spending weakens.

• The interest bill on the national debt keeps climbing, with 30-year borrowing costs the highest in 25 years, driven by heavy deficit spending.
• The deficit hit $1.8 trillion in just 10 months and could top $2 trillion, partly from tariff refunds messing up the books.
• Retail sales fell in July, their biggest drop in over a year, as high gas, diesel, food, and insurance costs squeeze regular people.
• This is a K-shaped economy: the wealthy are splurging (think $350 running shorts) while most people cut back, and stocks stay high even as demand softens.
• Gas prices are being pushed up by the ongoing Iran conflict, and diesel raises the cost of shipping food, making everything more expensive.

Outlook: With rates high, the deficit growing, and consumer spending weakening, more retailers are likely to report soft demand and the squeeze on ordinary households looks set to worsen.