Brief
U.S. debt interest payments rise to $3 billion a day in fiscal 2026
Federal budget deficit widened to $1.99 trillion while interest costs surged to $2.9 billion per day, according to Treasury figures reported by Fortune.
By Felo News Desk · Published
The Treasury Department released data on Friday showing that net interest payments on the national debt climbed 8% in fiscal 2026, reaching $1.05 trillion for the year – about $2.9 billion a day – outpacing growth in total federal spending, revenue and gross domestic product.
Fiscal 2026 ended last month with a budget deficit of $1.99 trillion, 12% larger than the $1.78 trillion shortfall recorded in fiscal 2025, Fortune reported. Revenue rose 3% to $5.4 trillion, while federal outlays increased 6% to $7.4 trillion. Social Security and Medicare remained the largest budget items; interest payments ranked third, surpassing defense spending and Medicaid.
Gross interest costs for the year totaled $1.36 trillion, based on an average interest rate of 3.53%, more than double the rate seen in 2021 before the Federal Reserve’s aggressive tightening cycle. The net interest figure of $1.05 trillion exceeds real GDP growth of roughly 2% and nominal GDP growth of about 6%.
The Peter G. Peterson Foundation estimated that the $1.05 trillion in net interest represents 3.2% of GDP, breaking the previous record set in 1991. With total U.S. debt at $40 trillion and publicly held debt equal to 100% of GDP, the Treasury is increasingly reliant on short‑term borrowing. Treasury Secretary Scott Bessent has been issuing more short‑term debt and retiring long‑term obligations; about one‑third of publicly held debt – more than $10 trillion – is due to mature within the next 12 months, meaning the government must refinance it at current higher rates.
In February, the Congressional Budget Office projected annual debt‑interest expenses would reach $2.1 trillion by 2036. However, Treasury yields have risen sharply after President Donald Trump launched the Iran war, pushing the 10‑year Treasury yield above 5%, well above the CBO’s forecast of 4.1% for the year. The Committee for a Responsible Federal Budget warned that if yields stay about one percentage point above CBO estimates, interest costs could climb to $2.8 trillion – 5.9% of GDP – by the end of the decade.
CRFB President Maya MacGuineas warned that “higher interest begets more debt, and greater debt begets higher rates and higher interest,” calling for immediate fiscal intervention, Fortune noted.
Key facts
- Net interest payments rose 8% to $1.05 trillion in fiscal 2026, about $2.9 billion a day. (fortune.com)
- The federal deficit widened to $1.99 trillion, 12% larger than the previous year. (fortune.com)
- Average interest rate on debt was 3.53%, more than double the 2021 rate. (fortune.com)
- One‑third of publicly held debt, over $10 trillion, matures within the next 12 months. (fortune.com)
Sources
- [1] fortune.com — originally reported as “U.S. debt interest payments hit $3 billion a day and jumped 8% in fiscal 2026 — faster than total federal spending, revenue and GDP growth”
