US national debt surpasses $40 trillion, exceeding earlier forecasts

This figure surpasses an earlier forecast by the Congressional Budget Office, which projected total borrowing would reach $39.4 trillion by the end of fiscal year 2026. The increase in debt is partly attributed to President Donald Trump’s invalidated tariffs and comes as long-term US obligations for social security and healthcare have grown, alongside rising interest payments. On Tuesday, yields on long-term Treasury bonds reached their highest level since 2007, reflecting increased price pressures due to conflict in the Middle East and concerns over US deficit spending.

This forces the US government to refinance debt at rates not seen since before the 2008 global financial crisis. The Treasury Department took action on Wednesday to stabilize the long-term bond market, which led to lower yields. Jessica Riedl, a budget and tax fellow at the Brookings Institution, noted that the US government has been on an unsustainable path with deficits, reaching approximately $2 trillion even during periods of peace and prosperity.

She added that deficits, which once concerned markets at three to four percent of GDP, are now closer to six to seven percent, making markets more apprehensive.