EET News (September 9) — The U.S. Congressional Budget Office (CBO) released a report on Thursday (8th), showing that the U.S. federal budget deficit for fiscal year 2026, ending September 30, increased to $1.993 trillion, up $218 billion or 12.2% from the previous fiscal year, marking the highest level since 2021. The deficit as a share of GDP exceeded 6%, higher than 5.8% in fiscal year 2025.
The report noted that although U.S. fiscal revenues rose by $169 billion in fiscal year 2026, expenditures increased by approximately $386 billion.
The "main culprit" behind the widening deficit is the sharp rise in debt interest costs. According to CBO data, net interest expenses for the U.S. in fiscal year 2026 exceeded $1.1 trillion, an increase of $115 billion or 11% compared to the same period last year.
Analysts point out that recent sharp rises in U.S. Treasury yields, with the 10-year yield hitting a 24-year high, have not yet fully reflected their impact on the budget. Since interest rate changes only affect newly issued debt, and refinancing of existing debt takes time as it matures, this implies that interest burdens will continue to grow in the coming years.
Shai Akabas, Deputy Vice President for Economic Policy at the U.S. think tank "Bipartisan Policy Center," said: "Against a backdrop of sustained economic growth and low unemployment, an annual deficit of $2 trillion is an unsustainable trend." (yc)
The report noted that although U.S. fiscal revenues rose by $169 billion in fiscal year 2026, expenditures increased by approximately $386 billion.
The "main culprit" behind the widening deficit is the sharp rise in debt interest costs. According to CBO data, net interest expenses for the U.S. in fiscal year 2026 exceeded $1.1 trillion, an increase of $115 billion or 11% compared to the same period last year.
Analysts point out that recent sharp rises in U.S. Treasury yields, with the 10-year yield hitting a 24-year high, have not yet fully reflected their impact on the budget. Since interest rate changes only affect newly issued debt, and refinancing of existing debt takes time as it matures, this implies that interest burdens will continue to grow in the coming years.
Shai Akabas, Deputy Vice President for Economic Policy at the U.S. think tank "Bipartisan Policy Center," said: "Against a backdrop of sustained economic growth and low unemployment, an annual deficit of $2 trillion is an unsustainable trend." (yc)