The U.S. federal budget deficit widened to $1.99 trillion for fiscal year 2026, 12% worse than in 2025, with revenues at $5.4 trillion and spending at $7.4 trillion. Net interest payments on the national debt jumped 8% to $1.05 trillion, roughly $2.9 billion per day, outpacing both real and nominal GDP growth. Gross U.S. debt stands at $40 trillion, and about one-third of publicly held debt, or more than $10 trillion, matures within twelve months, forcing the government to refinance at higher rates. Bond yields, further boosted by the Iran war launched by President Donald Trump, pushed the 10-year Treasury yield above 5%, significantly exceeding Congressional Budget Office forecasts. The Committee for a Responsible Federal Budget estimates that if rates remain about one percentage point above CBO projections, interest costs would surge to $2.8 trillion, or 5.9% of GDP, by the end of the decade, while CBO Director Phillip Swagel says faster economic growth alone is unlikely to stabilize the debt.
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