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Debt hits $40T
The U.S. national debt surpassed $40 trillion on Wednesday, with AP reporting the milestone as the debt reached $40 trillion as defense costs, Social Security and Medicare, and interest on the deficit make up a large share of federal spending.
“The national debt surpassed a record $40 trillion on Wednesday”
AP said the $40 trillion figure was recorded just five months after the U.S. hit a record $39 trillion debt in March, and it noted that the debt-to-GDP ratio is a focus of the Trump administration’s priorities.
CBS News reported that Treasury Department data released on Wednesday showed the nation’s debt reached $40.05 trillion on August 18, and it said the federal debt has ballooned because spending is outstripping revenue.
CBS News also quoted Michael Peterson, CEO of the Peter G. Peterson Foundation, saying, "We've been running deficits for the last 26 years" and "it's clearly been accelerating" as interest payments consume a larger share of spending.
Bond yields and buybacks
As the debt milestone landed, Boursorama reported that the Treasury increased long-term bond buybacks after a peak in 30-year bond yields, with the 30-year Treasury yield reaching the highest level in 19 years.
Boursorama said the Treasury would double the volume of its buybacks of government debt securities with maturities from 10 to 30 years to bring it to at least $4 billion per operation, effective from September 9 to November 4.
Boursorama also quoted Dan Gottlander of Citi saying, "This obviously does not change deficits," and it added that the Treasury could issue more Treasury bills or five- to ten-year notes.
In the same coverage, President Donald Trump told reporters, "No, I don’t think so," when asked whether Americans should be concerned about volatility in the bond market.
What comes next
AP reported that the Bipartisan Policy Center estimates the U.S. will most likely reach the $41.1 trillion debt limit sometime between late winter and mid-summer of 2027, requiring Congress to vote again on whether to raise or suspend it.
“reach the $41.1 trillion debt limit sometime between late winter and mid-summer of 2027”
AP also said experts warn the exploding debt is already affecting Americans’ pocketbooks by raising borrowing costs for mortgages and cars, lowering wages from businesses with less money to invest, and creating more expensive goods and services.
CBS News added that the public holds about 80% of the nation’s debt, and it said taxpayers could bear the brunt as the government issues more Treasury securities and must offer higher yields to attract investors.
CBS News quoted Peterson saying, "If the Treasury rate is going up, that means your mortgage rate is going up," linking the debt and interest costs to household credit costs and the broader fiscal tradeoffs ahead.
