US Posts Record $432 Billion July Budget Deficit as Debt Costs Surge
The US government recorded its largest July budget deficit ever at $432 billion, while monthly interest on the federal debt climbed to $118 billion.
US fiscal data show a record July budget shortfall of $432 billion, driven by faster federal spending. Interest on the federal debt rose $26 billion from the same month last year to $118 billion.
Total interest expense for fiscal 2026 has reached $1.17 trillion. That puts debt-servicing costs above both National Defense and Medicare spending.
In effect, the federal government now spends more on interest than on the entire US military or on healthcare for seniors, leaving less room to sustain higher interest rates.
Source: The Kobeissi Letter