US Interest Payments on Public Debt Reach Record $1.27 Trillion

US Treasury data shows that gross interest payments on public debt hit a record $1.267 trillion during the first 11 months of fiscal year 2026, marking a 12% increase year-over-year. Interest expenses now account for approximately 26% of total government receipts. With total public debt nearing $40.2 trillion, the government faces rising costs as older debt is refinanced at higher rates. Meanwhile, market expectations for a Federal Reserve rate hike in October have risen to 53%.