US national debt surpasses $40 trillion amid rising interest costs

The United States national debt has surpassed $40 trillion, a milestone reached in August amid rising borrowing costs. As the Treasury sells bonds to finance deficits and refinance maturing obligations, investor demand for higher yields is driving up benchmark rates, such as the 10-year Treasury yield, which rose to approximately 4.79% in 2026.

Interest expenses on the national debt have escalated significantly. Preliminary fiscal 2026 figures indicate that interest on debt held by the public is approximately $1.07 trillion, costing roughly $2.93 billion per day. When including interest credited to federal government accounts, the gross interest expense rises to approximately $1.36 trillion, or $3.73 billion daily.

This increase is driven by both a growing debt balance and a higher interest-cost ratio. Federal net interest rose from $352 billion in FY2021 to $970 billion in FY2025. For fiscal 2026, the Congressional Budget Office anticipates a deficit of $1.9 trillion, representing 5.8% of gross domestic product, which is notably higher than the 50-year average of 3.8%. These rising costs impact broader economic factors, including mortgage rates, consumer credit, and corporate financing.