Interest costs on US public debt have climbed to a record pace this fiscal year.
The US Treasury says gross interest on Treasury debt securities reached $1.267 trillion in the first 11 months of fiscal 2026, through August.
That is up from about $1.124 trillion in the same stretch of fiscal 2025. August alone carried $97.769 billion in gross interest outlays, or more than $3.15 billion a day.
With one month left in the fiscal year, the run rate points past $1.3 trillion for a full year for the first time, says The Kobeissi Letter on X.
“BREAKING: Interest costs on US public debt rose +$139 billion YoY in the first 11 months of FY2026, or +12%, to a record $1.27 trillion.
This represents ~26% of total US government receipts.
This also marks the 6th consecutive annual increase, totaling +$784 billion, or +162%…
The US government needs lower rates more than anyone.”
Total public debt stood near $40.200 trillion at the end of August, leaving interest among the largest federal budget lines as older low-rate debt rolls into higher coupons.
While the Kobeissi Letter says the US needs lower rates to reduce interest expense, investors appear to be expecting another hike next month.
“BREAKING: The Fed is now expected to hike interest rates again in October, with markets pricing in a 53% chance.
Last year, markets were expecting 3 interest rate cuts by October 2026.
If the Fed hikes again next month, rates will be +125 basis points higher than they were expected to be.”
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The post US Interest Payments on Public Debt Hit Record $1,267,362,000,000 Through August appeared first on The Daily Hodl.
