U.S. Interest Costs Hit Record $1 Trillion, Risking Debt Snowball
Net interest paid to outside holders reached $1.1 trillion, a record 3.4% of gross domestic product, as deficits and debt costs climbed.
- The Treasury Department reported record gross debt-service spending of $1.36 trillion for fiscal 2026, a figure that includes interest credited to federal trust funds such as Social Security.
- Spending Outran a record tax haul as total outlays reached $7.40 trillion against $5.40 trillion in Receipts, driving the deficit to $1.99 trillion, a 12% increase from $1.78 trillion in fiscal 2025.
- Net interest costs reached $1.05 trillion, up more than 8% from $970 billion in fiscal 2025, with The Committee for a Responsible Federal Budget noting this represents a record 3.4% of GDP.
- Increased debt supply weighs on the Year Treasury Bond ETF , which closed at $80.05 on Friday, up 0.1%, and gained 2.65% over the week as investors favored long bonds.
- The Peterson Foundation projects debt costs could reach 3.2% of GDP, while The CRFB projects annual deficits could reach $3.1 trillion by 2036 if current trends persist.
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Public finance in the United States is under increasing pressure, with net government debt interest exceeding $1 trillion during fiscal year 2026.
Interest on the National Debt Just Hit a Record $1.36 Trillion
The federal government just logged a debt-service bill so large it dwarfs the entire budgets of most countries, yet the bond market shrugged it off. Here is what that disconnect reveals about the hidden pressure building under long Treasury prices.
U.S. debt interest payments hit $3 billion a day and jumped 8% in fiscal 2026 — faster than total federal spending, revenue and GDP growth
Net interest payments rose 8% to $1.05 trillion in fiscal year 2026, while revenue increased 3% to $5.4 trillion and spending grew 6% to $7.4 trillion.
The cost of servicing the US public debt rose to a historic high in the 2026 fiscal year, as net interest payments exceeded $1 trillion for the first time. The development intensifies concerns about the long-term sustainability of American public finances, as an increasing portion of government revenues is directed to debt service. According to data from the US Treasury Department published on Friday and cited by Bloomberg, net interest expenses…
The cost of servicing the US public debt reached unprecedented levels in the 2026 fiscal year, which ended in September.
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