How Washington’s interest bill on the $40 trillion national debt exploded 14% in just 9 months

If you thought last year’s national debt numbers were chilling, you haven’t seen anything yet.

In the second week of August, the CBO released its Monthly Budget Review giving year-to-date totals, calculated through July, for federal FY 2026, ending September 30.

For the first 10 months of fiscal 2026, Washington’s carrying costs grew an astounding 14%, from $846 to $963 billion versus the same period in FY 2025, far and away the biggest jump of any expense line item.

By contrast, Social Security rose 5%, and Medicare and Medicaid 8% each.

In just 12 months, interest zoomed from equaling 64.9% of Social Security outlays to 70.1%.

A year ago, the category had barely edged past Medicare to become the 2nd largest budget cost after Social Security.

The huge increase in interest expense has two sources.

The first is the explosion in the federal debt.

Since the start of 2026 through August 22, that burden swelled another 7.3% to $40 trillion .

Since the start of 2019, the federal debt has swelled by nearly 50%.

And the indebtedness trajectory is steepening: In the past three weeks, the number’s accelerated at incredible 1% rate, or an annualized trajectory approaching 15%.

Second, interest rates have famously spiked big time in the past year.

Around 50% of debt held by the public is parked in Treasury Notes of 2 to 10 year maturities.

Since July of last year, the yield on the two year has advanced from 3.94% to today’s 4.18%, or 6%, while the 10-year’s waxed faster, from 4.37% to 4.69%, for a 7.3% rise.