US public debt interest hits record $1,267,362,000,000 through August

The US Treasury says gross interest on Treasury debt securities reached $1.267 trillion in the first 11 months of fiscal 2026 through August. The amount was about $1.124 trillion in the same period of fiscal 2025. August alone carried $97.769 billion in gross interest outlays, or more than $3.15 billion a day. The Kobeissi Letter said the current pace points to more than $1.3 trillion for the full fiscal year. It said interest costs rose by $139 billion year over year in the first 11 months of fiscal 2026, or 12%, to about $1.27 trillion. The letter said the amount represented about 26% of total US government receipts. It also said this was the sixth consecutive annual increase, totaling $784 billion, or 162%. The letter said the US government needs lower interest rates more than anyone else. Total public debt stood near $40.200 trillion at the end of August. Interest was among the largest federal budget lines as older low-rate debt rolled into higher coupons. Investors appeared to expect another rate hike the following month. The Kobeissi Letter said markets were pricing a 53% chance of another Federal Reserve rate hike in October. It also said markets had expected three rate cuts by October 2026 the previous year. The letter said another hike would leave rates 125 basis points higher than previously expected.