US federal debt surpasses $40 trillion for the first time

Published Aug 19, 10:01 PM UTC

On August 19, 2026, the US Treasury reported that federal debt exceeded $40 trillion for the first time, reaching $40.047 trillion. The milestone comes faster than the Congressional Budget Office's year-end forecast of $39.4 trillion, driven by rising health and social security borrowing, higher interest payments, and persistent deficits. Inflation concerns linked to the Middle East conflict and soaring energy prices have pushed long-term Treasury yields to their highest since 2007, increasing refinancing costs. The Treasury announced broader purchases of long-term bonds starting in September to ease rates. The debt has more than doubled since the 2008 financial crisis, now representing nearly 125% of GDP. Budget experts warn that deficits approaching 6-7% of GDP are unsettling markets. The Trump administration's tax cuts, military spending related to the Iran conflict, and Supreme Court-ordered tariff repayments have contributed to the widening deficit, despite promises to reduce spending.

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