Net interest payments on US government debt crossed $1 trillion for the first time in fiscal year 2026, a record that is intensifying concerns about a self-reinforcing debt spiral as the federal government’s borrowing costs climb faster than its revenue.
Net interest payments rose by $81.4 billion to reach a record $1.05 trillion, while total interest expenditure on the debt for the fiscal year hit $1.36 trillion overall, up $144 billion, or about 12%, from the prior year. In the first 11 months of the fiscal year alone, the government spent $1.27 trillion on interest, roughly 13% more than the same period a year earlier.
The jump reflects a structural shift as older Treasury securities issued during the era of near-zero interest rates mature and get refinanced into new debt carrying significantly higher yields, a dynamic that has steadily pushed the pace of interest-cost growth higher in recent years.
Total US public debt outstanding stood at roughly $40.27 trillion as of October 6, having crossed the $40 trillion mark in August. Annual interest expense has now risen to 18.5% of federal government revenue, surpassing the previous record of 18.4% set in 1991.
The milestone adds urgency to warnings from economists and institutions including the IMF that the US cannot simply grow its way out of its interest burden, with the combination of a larger debt base and higher refinancing rates creating conditions economists describe as a debt snowball, where interest costs themselves become one of the fastest-growing drivers of future borrowing.
