More than 20% of US tax revenue is currently allocated to servicing the national debt. According to the Congressional Budget Office, net interest payments exceeded $1.1 trillion in the fiscal year ending September 30, marking an 11% increase of $115 billion compared to the previous period.
The 10-year Treasury yield reached 5.35% on October 7, the highest level since 2002. Despite this, the average interest rate on all marketable Treasury debt was 3.475% in August. The Treasury recently auctioned $39 billion in 10-year notes at a yield of 5.3%, representing the highest auction yield since 2000.
The fiscal 2026 budget deficit reached $1.993 trillion, a 12% increase from the prior year. Federal spending grew by 6%, while revenue rose by 3%. Approximately 33% of marketable debt matures within 12 months, which may lead to higher average borrowing costs as this debt is refinanced.
President Donald Trump has proposed a plan to issue $5,000 checks to adults if Republicans retain control of Congress. This initiative is estimated to cost over $1 trillion, which would likely require additional government borrowing. The current deficit stands at nearly 6% of the national GDP.
