The U.S. national debt has reached a record $40.05 trillion, with $32.27 trillion held by the public. The federal deficit hit $432 billion in July, pushing the fiscal-year deficit to $1.799 trillion. Net interest costs are expected to exceed $1 trillion by fiscal 2026, adding significant pressure to the federal budget. The Treasury has responded by expanding debt buybacks in 10 to 30-year bonds to manage market pressure.
The U.S. national debt has reached an all-time high of $40.05 trillion, according to the latest Treasury data. This figure includes $32.27 trillion in debt held by the public and $7.78 trillion in intragovernmental debt.
The federal government’s spending has continued to outpace its revenue. The deficit for July was reported at $432 billion, the highest monthly level since March 2021.
This brings the deficit for the ongoing fiscal year to $1.799 trillion. This figure surpasses the total fiscal year deficit of $1.775 trillion recorded in 2025.
Rising interest rates are making this debt increasingly costly to service. The Treasury is refinancing its maturing debts at higher costs, driving up interest expenses.
The Congressional Budget Office projects that net interest costs will exceed $1 trillion by fiscal year 2026. Under current policies, these costs are expected to reach $2.1 trillion in fiscal 2036.
Long-term bond yields have risen on fears of inflation and government borrowing. The yield on the 30-year bond recently rose to 5.34%, its highest point since 2007.
In response to market pressure, the Treasury has expanded its repurchase activities in 10 to 30-year bonds. The scale of these repurchases has doubled from $2 billion to at least $4 billion per activity.
While this step has brought down long-term interest rates, the repurchases remain small relative to the overall Treasury market. Businesses continue to borrow substantial sums to finance AI infrastructure projects.
The Congressional Budget Office has stated that publicly held debt will be 101% of America’s GDP in 2026. This figure is projected to hit 120% in 2036.
