US National Debt Tops $40T, Doubles in a Decade
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- US national debt surpassed $40.05 trillion on August 18, more than doubling from just under $20 trillion in 2016 and arriving ahead of the Congressional Budget Office's projection of $39.6 trillion by the end of fiscal year 2026.
- 30-year Treasury yields hit 5.34% on Tuesday — the highest in nearly 20 years — driven by oil prices linked to the US-Iran war, concerns over AI investment returns, and inflation fears.
- The US Treasury announced it will double bond buyback operations from $2 billion to $4 billion between September 9 and November 4, a move that pushed 30-year yields down to 5.18%.
- The US debt-to-GDP ratio stands at 125.8% per the IMF, among the highest of the world's largest economies and trailing only Japan's, which exceeds 200%.
- The Federal Reserve held its benchmark rate at 3.50%–3.75% for the fifth consecutive meeting, with minutes revealing several officials favored increases and warning rate hikes would likely be necessary if inflation does not decline toward the 2% target.
- David Jacks of the National University of Singapore warned that debt management difficulties could eventually trigger disruptions on the scale of the 2008 financial crisis, saying the pace of growth is accelerating and 'at some point, the bills will come due.'
- The US is nearing its $41.1 trillion debt ceiling, with the CBO projecting total debt could climb to approximately $64 trillion by 2036.
Why it matters: Treasury's doubling of bond buybacks — from $2 billion to $4 billion — was widely viewed as a midterm-timed intervention, with economist Mohamed El-Erian suggesting it could signal a shift toward yield curve control. Consumers are already absorbing the impact through a 6.67% average 30-year mortgage rate, even as the debt approaches its $41.1 trillion statutory ceiling.
Ask SkimNews
