U.S. Debt Interest Hits $1.05 Trillion as 2026 Deficit Widens to $1.99 Trillion
Updated
Updated · Fortune · Oct 17
U.S. Debt Interest Hits $1.05 Trillion as 2026 Deficit Widens to $1.99 Trillion
3 articles · Updated · Fortune · Oct 17
Summary
$1.05 trillion in net interest payments made debt service the federal budget’s third-largest cost in fiscal 2026, behind Social Security and Medicare but above defense and Medicaid.
Treasury data showed the deficit widened 12% to $1.99 trillion as spending rose 6% to $7.4 trillion, outpacing a 3% revenue gain to $5.4 trillion.
Higher rates drove the jump: gross interest costs reached $1.36 trillion at an average 3.53%, more than double 2021 levels, while net interest equaled about $2.9 billion a day and 3.2% of GDP.
refinancing risk is rising because about one-third of publicly held debt—more than $10 trillion—matures within 12 months, leaving Washington to roll it over at yields now above 5% on the 10-year Treasury.
Budget analysts say growth alone is unlikely to contain the debt; if yields stay roughly 1 point above CBO assumptions, annual interest costs could reach $2.8 trillion, or 5.9% of GDP, by 2036.