US government debt interest payments reached 1.05 trillion dollars in fiscal year 2026

The US government's debt interest payments exceeded 1 trillion dollars in fiscal year 2026, rising to 1.05 trillion dollars and reaching a record level.

According to US Treasury Department data, net interest expenses rose to 1.05 trillion dollars in the 12-month period leading up to September. Thus, the interest bill, which was 970 billion dollars in fiscal year 2025, increased by over 8 percent. The research organization Peter G. Peterson Foundation expects the ratio of interest expenses to gross domestic product (GDP) to reach 3.2 percent.

The rise in interest expenses is driven by a growing debt stock and higher interest rates. While a key debt indicator exceeded 32 trillion dollars, the average interest rate rose to 3.52 percent as of the end of September. The rising rates prompted US Treasury Secretary Scott Bessent to take steps aimed at keeping borrowing costs under control.

Economists state that current conditions do not yet point to a sudden debt crisis, but that the picture means an erosion of the country's fiscal capacity over time.