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With a trimester left of the 2026 fiscal year, the US Treasury has already borrowed more money than in the whole of 2025, with the most recent estimates placing borrowing for the period ending September at an expected $1.4 trillion.
FY2025 saw $1.3 trillion borrowed over the whole 12 months, and with plenty of time left, bond yields pushing multi-decade highs, and the Iran war still unresolved, it is certain the US will pass $40 trillion of debt by the end of the calendar year.
A press release from the Treasury Department outlined expected borrowing levels for the rest of the year, which would see Treasury borrow $628 billion for the October–December 2026 quarter. It follows on news from the Dept. that borrowing expectations during the May-September period increased $68 billion above existing estimations.
On top of this, the Congressional Budget Office (CBO) estimates that net interest on public debt for the fiscal year so far has hit $857 billion: roughly $23.8 billion paid out every week.
This is a frightening, 13% increase over the same 9-month period from last year, and flies in the face of long-held beliefs that economic growth can outpace debt, as the US economy as measured in GDP grew at a rather uninspiring 1.2% for the second quarter, and is on pace for somewhere between 3% and 4.5% for the year, assuming away recession.
On top of the interest costs, entitlement payments increased 23% compared to the same period in FY2025. Spending for just these 4 outlays increased 36%, totaling $269 billion according to totals reported in Fortune.
“The FY 2026 deficit has now passed the FY 2025 deficit–and it is likely to stay that way for the rest of the fiscal year,” said Maya MacGuineas, president of the Committee for a Responsible Government Budget, in a statement shared with Fortune. “We will likely borrow $2 trillion or more this fiscal year—an astounding figure”.
“Social Security and Medicare are within seven years of trust fund exhaustion, and action needs to be taken to prevent across-the-board cuts to both programs”.
WaL reported at the beginning of the year that with one-third of the US National Debt maturing this year, and bond yields sitting higher than interest rates, the Federal Reserve and the Trump Administration more broadly had a critical need to improve economic activity and reduce bond yields.
The pair have achieved quite the contrary, with multiple crises in the Japanese bond and currency markets and a surprise war in Iran coupled with the resulting oil shock creating some of the highest bond yields seen in two decades. This year’s bond auctions have featured heavy reliance on short term debt, with securities dated 2 years and shorter making up a huge majority of auction volume. In theory this will help the government avoid financing at high yields like 5.2%, such as are found in the 20-year and 30-year bond market, but only if the Treasury/Fed have a plan to see yields come down over the next 3, 6, 9, or 12 months. WaL
