The US national debt is closing in on $40 trillion, and Bank of America strategist Michael Hartnett expects the next milestone, $50 trillion, by July 2029. Interest costs on the debt have already topped $1 trillion a year, and the Congressional Budget Office projects that figure will roughly double within a decade.
The US national debt has climbed to approximately $39.9 trillion as of mid-August 2026, and it is set to breach $40 trillion in the coming days. The government is adding $7 billion to $12 billion in new debt every single day.
Bank of America's chief equity strategist, Michael Hartnett, predicts that the next milestone, $50 trillion, will be reached in July 2029. These landmarks reinforce a market perception that fixed-income investments are losing bets. According to MarketWatch, Hartnett summarizes the sentiment as “Anything But Bonds.”
Interest costs are climbing fast
In his weekly "Flow Show" note, Hartnett calculates that the cost of servicing the debt's interest has reached $1.5 trillion yearly. That burden keeps rising unless the yield on US 5-year Treasurys falls to 3.25% or lower, he notes.
Separately, net interest payments on the federal debt have already surpassed $1 trillion annually, a figure that now rivals what the government spends on Medicare. The Congressional Budget Office projects interest costs will reach approximately $2.1 trillion per year by 2036, which would surpass defense spending.
Debt-to-GDP ratio keeps climbing
The US economy produces roughly $29 trillion in goods and services annually. The government now owes more than 100% of that output. The Congressional Budget Office projects the ratio will climb to 120% by 2036.
Foreign holders of US Treasuries own a large share of the debt held by the public, approximately $32.1 to $32.2 trillion as of recent figures. Every 100 basis points of higher interest rates adds tens of billions of dollars in additional annual interest expense on a debt load this size.
Sources: MarketWatch, Crypto Briefing
Trading involves risk.
Risk Disclaimer
