U.S. total public debt outstanding crossed $40 trillion for the first time on August 19, reaching $40.047 trillion, with the last trillion added in under five months. Federal debt rose by $11.6 trillion across Donald Trump's two terms, including $3.8 trillion since January 2025, and by $8.4 trillion during Joe Biden's four-year term, with about a third of the combined increase coming from pandemic-era borrowing. Interest on the debt has climbed to $1.1 trillion, the second-largest expense in the federal budget after Social Security and above Medicare outlays for the first time in the first 10 months of fiscal 2026, and Fortune reported annualized interest payments have since climbed to $1.25 trillion. On September 9, the 10-year Treasury yielded 4.83% and the 30-year yielded 5.28%, well above the 3.75% federal funds upper bound, while real GDP expanded just 1.5% in the second quarter of 2026 and foreign investors holding nearly a third of Treasuries have cut demand over the past year. Maya MacGuineas of the Committee for a Responsible Federal Budget warned the debt is felt throughout the economy, and KPMG chief economist Diane Swonk said it is pushing up interest rates on everything from auto loans to buying a new home.
Debt topping $40T with $1.25T annualized interest and foreign demand cuts pushes the 10-year Treasury yield up to 4.83%, well above the 3.75% fed funds bound.
Record debt and reduced foreign Treasury demand lift the 30-year yield to 5.28%, above the fed funds upper bound.
