Treasury data shows net interest payments on the national debt rose 8% to $1.05 trillion in fiscal 2026, outpacing growth in total spending, revenue, and GDP. The federal budget deficit widened to $1.99 trillion, driven by spending that grew faster than revenue. With gross U.S. debt at $40 trillion, interest costs now exceed real GDP growth and represent 3.2% of GDP. Higher bond yields and a large portion of debt maturing within 12 months threaten to increase future borrowing costs significantly.
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