US Deficit Hits $1.99 Trillion as Interest Payments Cross $1.1 Trillion

The US federal deficit reached $1.993 trillion for the fiscal year ending September 30, marking a 12% increase from the previous year as government spending outpaced revenue by nearly $2 trillion. Net interest payments on the national debt officially crossed $1.1 trillion, an $115 billion jump that now consumes more than 20% of all collected federal tax dollars. The 10-year Treasury yield touched 5.35% on October 7, hitting its highest level since 2002 and pushing the Treasury's borrowing costs at a recent $39 billion auction to 5.3%. Approximately 33% of all marketable US debt matures within the next 12 months and will need to be refinanced at these elevated rates. The government spent $7.4 trillion while collecting just $5.4 trillion in revenue, leaving the deficit near 6% of GDP in an otherwise growing economy.