US Debt Tops $40 Trillion as Borrowing Costs Mount

By Staff, Agencies

US public debt has surpassed $40 trillion for the first time, according to the Treasury Department, as rising borrowing costs and growing deficits intensify concerns over the country’s fiscal outlook.

The milestone comes as 30-year Treasury yields reach 5.3%, their highest level since 2007, amid doubts over the Trump administration’s ability to contain inflation and reduce the deficit.

The budget shortfall is expected to exceed $2 trillion this year, or nearly 6% of GDP, with increased war spending and lower revenues adding to the pressure.

The debt has also grown rapidly under previous administrations, including Joe Biden’s, whose pandemic-era spending and investment programs contributed to higher borrowing.

At $40.05 trillion, gross US debt now equals about 124% of GDP, while debt held by the public stands at $37.64 trillion, or 99% of GDP. Debt-servicing costs are expected to reach $1.4 trillion this year and could soon surpass Social Security as the government’s largest expenditure.

Meanwhile, Treasury Secretary Scott Bessent announced plans to double Treasury buybacks to inject liquidity and ease borrowing costs, while Trump continued pressing the Federal Reserve to cut interest rates.

The Congressional Budget Office has warned that the US fiscal trajectory is unsustainable, projecting publicly held debt to rise from 101% of GDP in 2026 to 120% by 2036.