U.S. government debt has surpassed $40 trillion for the first time, reaching $40.05 trillion as of Tuesday, according to the Treasury Department.
The milestone comes roughly four and a half years after the debt topped $30 trillion. Years of escalating budget deficits, pushed higher by stimulus funding during the Covid pandemic, have brought the public share of the debt near 100%. Ten years ago, the debt level stood at $19.4 trillion.
In the most recent monthly accounting of U.S. finances, the Treasury reported a $432.3 billion deficit in July, the highest monthly total since March 2021. The year-to-date shortfall is nearing $1.8 trillion, higher than the same period a year ago.
Market Impact
The fiscal situation has had market ramifications, which reportedly pushed the Treasury Department to announce Wednesday that it is upping the size of its repurchases at the long end of the yield curve. Treasury yields have surged since late June, hitting levels not seen since before the global financial crisis that ultimately saw the Federal Reserve take benchmark rates to near zero. The Fed also instituted an aggressive bond repurchasing program in late 2008 that helped suppress rates.
