Business · Economy · 10 hrs ago
US debt interest costs hit a record $1.05 trillion
The US government paid a record $1.05 trillion in net interest in the fiscal year that ended in September 2026.
That was more than 8% above the $970 billion paid in fiscal 2025, according to Treasury data.
The increase reflects a larger debt and higher interest rates: a key measure of US debt is above $32 trillion, and the average rate paid on tradable Treasury securities was 3.52% at September's end.
Interest costs are now one of the federal government's three largest expenses, behind Social Security and Medicare.
Economists say the country is not in a crisis, and demand at government debt auctions remains strong, but rising costs could leave the US more exposed to economic shocks.
A shock that pushes rates higher could raise the deficit and debt, which could then put further pressure on rates and the economy.
Treasury Secretary Scott Bessent has taken steps to contain rising yields, while the Congressional Budget Office has projected that debt could exceed 106% of GDP by 2030.
Net interest costs on US government debt reached a record $1.05 trillion in the fiscal year ending in September 2026.
That was more than 8% above the roughly $970 billion recorded in fiscal 2025, according to Treasury Department data.
The increase reflects a larger amount of debt and higher interest rates, with one major measure of US debt exceeding $32 trillion.
Economists said the United States was not facing a crisis, but warned that rising costs could leave its finances more vulnerable to economic shocks.
- Who
- The US government paid the interest. Treasury Secretary Scott Bessent took steps to contain rising yields.
- What
- Net interest costs on US government debt reached a record $1.05 trillion.
- When
- In the fiscal year ending in September 2026. The Treasury released the data on Friday, October 16.
- Where
- United States.
- Why
- The costs rose as the amount of debt increased and interest rates climbed.
This story does not have two clearly opposing sides.
Net interest costs were about $970 billion.
Congressional Budget Office director Phillip Swagel spoke in Minneapolis about managing the situation while warning of greater vulnerability.
Net interest costs for the fiscal year ending that month reached $1.05 trillion.
The Treasury Department released the data on interest costs.
- Fiscal year
- 2026
- Net interest costs
- $1.05 trillion
- Increase from fiscal 2025
- More than 8%
- Debt measure
- More than $32 trillion
- Average rate on marketable Treasury securities
- 3.52% at the end of September
- Nominal GDP growth
- 6.3% year over year in the second quarter
2 sources
What people are saying
It doesn't look like a crisis — it's more a slow erosion (of fiscal capacity)
Somehow, we are managing the situation, even with rising interest rates
A fiscal apocalypse is not upon us yet