US National Debt Tops $40 Trillion
The U.S. national debt surpassed $40 trillion for the first time on Wednesday, accelerating past forecasts due to rising federal deficits and $100 billion in court-ordered tariff refunds. The milestone triggered a spike in long-term Treasury yields, forcing the Treasury Department to double debt buybacks to stabilize bond markets.
Crossing $40 trillion converts rising debt into an immediate market crisis — forcing Treasury interventions as interest costs eclipse major budget priorities and strain global bond confidence.
Background The federal government routinely spends more than it collects in revenue, driving persistent fiscal deficits. Surging interest costs and expanding entitlement spending have rapidly expanded total debt, doubling America's national debt in under a decade.
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Treasury Department data published Wednesday confirmed gross national debt reached $40.05 trillion, breaching the threshold months earlier than Congressional Budget Office projections.
Surging debt levels and persistent inflation pushed 30-year Treasury yields to 19-year highs, prompting the Treasury to double government debt buybacks to calm nervous investors.
Higher borrowing costs pushed annual net interest payments to $1.17 trillion, while Supreme Court rulings invalidating import tariffs forced the government to refund $100 billion in collected duties.
The fiscal milestone arrives as Congress remains locked in an impasse over federal spending bills needed to avert a government shutdown when the fiscal year ends on September 30.
Watch September spending negotiations in Congress: if lawmakers fail to pass a funding agreement before September 30, escalating debt friction could trigger a federal government shutdown.
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