US national debt passes $40tn after doubling in a decade
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- US national debt surpassed $40.05tn as of August 18, more than doubling from roughly $20tn in 2016 and outpacing CBO projections, which had forecast $39.6tn would not be reached until the end of fiscal 2026.
- 30-year Treasury bond yields hit 5.34% on Tuesday — the highest level in nearly 20 years — with the surge driven by oil prices tied to the US-Iran war, inflation fears, and heavy borrowing by tech firms to fund AI development.
- The Treasury Department announced it will more than double its bond buyback operations from $2bn to at least $4bn, effective September 9 through November 4, an intervention analysts described as an attempt to relieve pressure on long-term borrowing costs.
- Federal Reserve minutes released Wednesday showed inflation concerns deepened at the last meeting, with "several participants" backing rate increases; the central bank held its benchmark rate at 3.50%–3.75% for a fifth consecutive time.
- The Congressional Budget Office projects US debt will climb to roughly $64tn by 2036, with current borrowing already nearing the $41.1tn debt ceiling.
- Average 30-year fixed mortgage rates stand at 6.67% per Freddie Mac — below the 7.7% average in 2023 but rising as elevated bond yields feed through into mortgages, car loans, and credit cards.
Why it matters: The $40tn milestone arrived a full year ahead of CBO projections and sits within reach of the $41.1tn debt ceiling, while the Treasury's doubling of buybacks three months before midterms shows how seriously officials now treat 5.34% yields on 30-year debt — a level not seen in nearly 20 years.
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