US National Debt Surpasses $40 Trillion, Raising Fresh Economic Concerns

The US government’s national debt has surpassed $40 trillion, marking a historic milestone after more than doubling over the past decade. According to Treasury Department data, the rapid accumulation has been driven largely by heavy government spending under both the Donald Trump and Joe Biden administrations, along with rising interest payments. US debt stood below $20 trillion in 2016, while the Congressional Budget Office had previously projected it would reach $39.6 trillion by the end of fiscal year 2026. The faster-than-expected increase has renewed concerns over the cost of servicing the debt and its broader impact on the economy. The yield on 30-year US Treasury bonds reached 5.34%, its highest level in two decades, pushing up borrowing costs for consumers, including mortgages, auto loans and credit cards. The average rate on a 30-year fixed mortgage has climbed to 6.67%, according to Freddie Mac. Meanwhile, oil-price pressures linked to US-Iran tensions and heavy borrowing by technology companies to finance artificial intelligence development are adding to market uncertainty. With midterm elections approaching, the Treasury Department has doubled its bond buyback operation from $2 billion to $4 billion between September 9 and November 4 in an effort to support market liquidity and manage borrowing costs. Economists, however, warn that such measures may offer only limited relief given the scale of the debt. The IMF estimates the US debt-to-GDP ratio at 125.8%, higher than the UK’s 103.6% and China’s 106.9%, although Japan’s ratio remains above 200%. With the Federal Reserve maintaining its policy rate at 3.50%–3.75% amid persistent inflation concerns, investors are closely watching how rising debt and interest costs could affect US economic growth, capital markets and equities.