US Debt Hits $39.4 Trillion as Interest Payments Soar and 30-Year Treasury Yield Tops 5%

• US federal debt has reached a record $39.4 trillion, up $3.2 trillion over the past year
• Annual interest payments climbed to roughly $1.35 trillion as higher interest rates continue to raise borrowing costs
• The 30-year Treasury yield moved above 5%, adding pressure to future government financing costs

The US debt has reached a record $39.4 trillion, but investors are paying closer attention to the price of financing it. As federal borrowing continues to climb, investors are increasingly focused on what it costs to finance that debt. The 30-year Treasury yield has climbed above 5%, pushing long-term borrowing costs higher. Meanwhile, the annual interest payments have surged to record levels. Together, the developments are raising brand new questions about the US’s fiscal outlook.

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US Debt and Interest Payments Continue to Set New Records

The US national debt has climbed to a record $39.4 trillion, according to the US Treasury. This marked an increase of roughly $3.2 trillion over the past year. Since 2020, total debt has expanded by more than $16 trillion. It is mostly driven by higher government spending, larger deficits, and rising financing costs.

Servicing this debt is becoming increasingly expensive. Treasury data shows the federal government has already spent $827 billion on net interest through fiscal year 2026. On a continuous 12-month basis, federal debt interest payments have climbed to roughly $1.35 trillion. This makes interest one of the fastest-growing expenses in the federal budget.

The growing interest bill is also drawing more attention in Washington. The Congressional Budget Office (CBO) has warned that interest costs will take up an increasing share of federal spending in the years ahead. This leaves less room in the budget for other priorities if borrowing keeps rising.

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30-Year Treasury Yield Above 5% Raises Borrowing Cost Concerns

Adding to the pressure, the 30-year Treasury yield climbed above 5.1%. This is a level not seen in years. Higher US Treasury yields increase the cost of issuing new government debt and refinancing existing obligations as older, lower-rate bonds mature.

Economist Peter Schiff pointed to the growing disconnect between today’s borrowing costs and the size of the federal debt. In a post on X, he noted that while the 10-year Treasury yield is approaching levels last seen in 2007, the US government debt has expanded from roughly $9 trillion then to nearly $40 trillion today. He argued that higher interest rates currently pose a much larger fiscal challenge.

The overall macro backdrop adds another layer of uncertainty. The International Monetary Fund’s (IMF) latest World Economic Outlook projects 1.7% economic growth for advanced economies in 2026. US specifically stands at 2.3%. The IMF said higher borrowing costs are still putting pressure on economies, despite stronger-than-expected global growth.

Currently, investors are watching more than the debt itself. With US debt, interest payments, and Treasury bond yields all pushing higher at the same time, the cost of financing the country’s balance sheet is becoming one of the defining market themes of 2026.

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