For the first time ever, the U.S. government has spent over $1 trillion this year on interest payments for its $35.3 trillion national debt, according to a report from the Treasury Department on Thursday.
With the Federal Reserve maintaining its highest benchmark rates in 23 years, the government has spent $1.049 trillion on debt service so far, marking a 30% increase from the same period last year. This is part of a projected $1.158 trillion in total payments for the year.
After accounting for the interest earned on its investments, the net interest payments amount to $843 billion, surpassing all other expenditure categories except Social Security and Medicare.
This increase in debt service costs coincides with a sharp rise in the U.S. budget deficit, which approached $2 trillion for the year in August.
With one month remaining in the fiscal year, the August deficit surged by $380 billion, a stark contrast to the $89 billion surplus recorded for the same month last year, largely due to accounting adjustments related to student debt forgiveness.
This brings the 2024 deficit to nearly $1.9 trillion, a 24% increase from the previous year.
While the Federal Reserve is anticipated to reduce rates slightly by a quarter percentage point next week, Treasury yields have recently dropped in anticipation of further rate adjustments. The yield on the benchmark 10-year note is now approximately 3.7%, down more than three-quarters of a percentage point since early July.
Trump has told Walmart, $WMT, to 'eat the tariffs' instead of raising prices
5/17/2025 11:59 PMMoody’s downgrades US credit rating to Aa1 from Aaa
5/17/2025 4:55 AMYouTube, GOOGL, viewers will start seeing ads after ‘peak’ moments in videos
5/16/2025 7:55 PMCEOs say that just a fraction of AI initiatives are actually delivering the return on investment they expected
5/16/2025 7:51 PM
Stay Updated
Subscribe to our newsletter for the latest financial insights and news.
