U.S. Net Interest Spending Reaches $1.05 Trillion in FY 2026, Up Over 8% Year-on-Year

As of the end of September in FY 2026, the U.S. federal government's net interest spending reached $1.05 trillion, an increase of over 8% from $970 billion in FY 2025, marking a record high. The Peter G. Peterson Foundation estimates that this spending accounts for 3.2% of GDP, surpassing the previous record set in 1991. The interest burden is consuming a larger share of federal revenue, increasing the pressure to borrow to pay interest, and potentially weakening the U.S. fiscal space to respond to economic shocks.

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