U.S. Public Debt Tops $40 Trillion for First Time

U.S. public debt has surpassed $40 trillion for the first time, marking a historic milestone as persistent federal deficits and years of elevated government borrowing continue to expand the nation’s debt burden.

According to U.S. Treasury Department data released Wednesday, total public debt reached $40.047 trillion on Tuesday. The figure consists of approximately $32.266 trillion in Treasury securities held by the public and another $7.782 trillion in intragovernmental debt holdings.

The milestone highlights the rapid expansion of U.S. federal debt over the past decade. In January 2017, when President Donald Trump began his first term, total federal debt stood at roughly $19.95 trillion. Since then, the amount has more than doubled.

A significant portion of that increase occurred during the COVID-19 pandemic. Roughly one-third of the growth accumulated during a two-year period when Washington dramatically increased borrowing to finance pandemic relief and economic support measures under both Trump and former President Joe Biden.

Beyond emergency pandemic spending, the rising U.S. national debt reflects a combination of fiscal policies enacted by successive administrations and a persistent gap between federal tax revenue and government expenditures.

The $40 trillion milestone comes as investors are also paying closer attention to the U.S. Treasury market and long-term bond yields.

Treasury Secretary Scott Bessent said Wednesday that the government plans to double the size of buyback operations for 10- to 30-year Treasury securities to at least $4 billion per transaction. The move is aimed at improving market conditions and putting downward pressure on long-term Treasury yields.

Meanwhile, concerns surrounding the risks of holding longer-dated government debt have increased. The 10-year Treasury term premium, which represents the additional yield investors demand for taking on the risks associated with holding bonds over an extended period, climbed this week to its highest level in more than 12 years.

The combination of record federal debt, higher borrowing requirements and elevated long-term yields is likely to keep U.S. fiscal policy, Treasury bonds and government debt levels firmly in focus for financial markets.