U.S. FY2026 Net Interest Expense Hits a Record $1.05 Trillion, Up Over 8% Year-over-Year

U.S. Treasury data shows that in the 2026 fiscal year ending at the end of September, the federal government's net interest expenditure reached $1.05 trillion, representing an increase of more than 8% from the $970 billion recorded in FY2025 and marking an all-time high. The Peter G. Peterson Foundation estimates that this expenditure equals 3.2% of GDP, surpassing the previous record set in 1991. The previous quarter's GDP figures will be released later this month. The analysis notes that the interest burden is consuming an increasingly large share of federal revenue, raising pressure to borrow to cover interest payments, and potentially eroding the U.S. fiscal capacity to respond to economic shocks.

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