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Thu, 20 Aug 2026

Thu, 20 Aug 2026 US national debt passes $40tn after doubling in a decade

It comes after the interest rate on 30-year bonds reached the highest level in almost 20 years.
The US national debt has surpassed $40 trillion, more than doubling in just over a decade. According to Treasury figures, this milestone was reached on August 18th. The increase reflects years of heavy spending under both President Donald Trump and President Joe Biden, as well as rising interest payments that have added to the total. In 2016, the national debt stood at around $20 trillion. The Congressional Budget Office had projected a total of $39.6 trillion by the end of fiscal year 2026, but the actual figure has exceeded this estimate. The CBO also projects that the US is nearing its $41.1 trillion debt ceiling and estimates that the national debt will climb to around $64 trillion by 2036. As the federal government continues to spend more money to cover budget deficits, consumers are facing higher interest rates and inflation. The interest rate on 30-year bonds has hit a 20-year high of 5.34%, which affects how much the US government, companies, and individuals pay to borrow. This surge in bond yields is driven by rising oil prices linked to the US-Iran conflict and investors' concerns over inflation. There are also worries about the large amounts of cash being borrowed by tech firms to develop artificial intelligence, with uncertain timelines and returns on investment. To provide relief, the Treasury Department has announced it will increase its buyback operations for longer-term bonds from $2 billion to at least $4 billion starting in September. John Canavan, a lead analyst at Oxford Economics, believes this move is an attempt to provide short-term relief but notes that the size of outstanding Treasury debt makes it unlikely to have a meaningful impact on long-term borrowing costs. Rene Albrecht, senior analyst at DZ Bank, suggests that the US government fears the "pain" of 5% or higher yields over the long term. Mohamed A. El-Erian, an economist, thinks this move may be part of a broader strategy to keep control of interest rates through yield curve control, but warns it risks unintended consequences and collateral damage.