US debt interest hit a record $1.36 trillion in FY2026, up 12%
As seen on the 24/7 Wall St. homepage on October 17, 2026.
Interest costs now eat a quarter of every federal dollar collected, and they are growing four times faster than receipts, which keeps term premium and long-end Treasury yields in play for every portfolio.
BREAKING: Interest expense on US public debt rose +$144 billion YoY in FY2026, or +12%, to a record $1.36 trillion. This marks the 6th consecutive annual increase, for a total of +$839 billion, or +161%. For perspective, total receipts rose just +3.2% YoY, to $5.40 trillion. https://t.co/r3xRvX9EpB
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The federal government's annual interest bill has now risen for six straight years, a compounding budget pressure that does not reverse quickly regardless of the deficit in any single year.
Total federal receipts grew only 3.2% over the same period, so interest costs expanded at nearly four times the pace of the government's income.
Interest now consumes roughly a quarter of every dollar Washington collects before a single discretionary item is funded, which keeps long-end Treasury yields sensitive to any fiscal headline.
For portfolio managers, term premium on longer-dated Treasuries remains a live risk factor. A debt-service cost structurally outpacing revenue growth gives the bond market little reason to let long yields settle lower without a credible shift in the fiscal outlook.