US National Debt Hits $40 Trillion as Interest Costs Rise

The United States national debt reached $40 trillion by August 22, 2026, triggering a 14% increase in federal interest costs. Data from the Congressional Budget Office shows that interest expenses rose to $963 billion in the first 10 months of fiscal 2026, up from $846 billion during the same period in 2025.

This surge is driven by the expanding federal debt and rising Treasury yields, with the 10-year Treasury note yield climbing from 4.37% to 4.69% since July 2025. In response, Treasury Secretary Scott Bessent unveiled a plan on August 19 to purchase large quantities of 10-year Treasuries while selling shorter-term bonds at lower rates to reduce average yields.

Despite these efforts to manage borrowing costs, the budget deficit grew 10% to $1.8 trillion through July. This trajectory indicates a continuing need for the government to issue more debt to fund operations.