Federal debt held by the public reached 100.03 percent of gross domestic product at the end of fiscal year 2026, The Wall Street Journal reported on Thursday, the first time the ratio has reached triple digits at the end of a fiscal year since 1946. The government reported 32.2 trillion dollars in publicly held debt as of September 30, the last day of the fiscal year. Measured against GDP for the fiscal year, that came to just over the line, the Journal reported.
The milestone closes a fiscal year in which the government ran a deficit of nearly 2 trillion dollars, or 6.2 percent of GDP, according to the Journal. The ratio was 99.4 percent at the end of fiscal 2025, and the result came in below the Congressional Budget Office’s February forecast of 100.6 percent. The record for the measure is 106 percent, set in 1946 after the borrowing that paid for World War II. President Donald Trump is the first president since Harry Truman to see the fiscal-year ratio this high.
Federal debt held by the public is the money owed to outside lenders, including private investors, foreign entities and the Federal Reserve. It excludes debt held by internal government accounts, such as Treasury securities held in the Social Security trust fund. Most headlines cite gross federal debt, which recently passed 40 trillion dollars.
How the federal debt ratio reached 100 percent
In 2000, the Journal reported, the ratio was 33.7 percent and falling. The government was running surpluses, helped by a strong economy. Congress then passed multiple tax cuts and raised spending in response to the September 11 attacks, the 2008 to 2009 financial crisis and the Covid-19 pandemic, while an aging population pushed up Social Security and Medicare costs. No single president or party produced this number, the Journal noted.
The Committee for a Responsible Federal Budget, a nonpartisan budget watchdog, estimated fiscal 2026 revenue at 5.4 trillion dollars, or 16.7 percent of GDP, against spending of 7.4 trillion dollars, or 22.9 percent of GDP. The Congressional Budget Office, in its monthly budget review released on October 8, estimated the fiscal 2026 deficit at 2.0 trillion dollars, 218 billion dollars more than the deficit recorded in fiscal 2025.
Interest on the federal debt is now one of the largest pressures on the budget. The Committee for a Responsible Federal Budget estimated interest payments at 1.1 trillion dollars for the year, a record 3.4 percent of GDP. Net interest rose 115 billion dollars, or 11 percent, as the debt grew and long-term rates rose, according to an analysis of the Congressional Budget Office data.
Federal debt and the interest rate squeeze
On October 28, the 10-year Treasury yield was at 5.05 percent and the 30-year yield at 5.37 percent, the Journal reported. By the Journal’s math, rates running just 0.1 percentage point above the Congressional Budget Office’s forecasts would add 379 billion dollars in interest over a decade.
The fiscal-year figure is the official milestone, but the country had already passed the line once in a different calculation. The Journal reported that the United States hit 100 percent in an intrayear calculation earlier this year, and the Committee for a Responsible Federal Budget, as cited by Fortune, put the trailing ratio at 100.2 percent at the end of March. The Journal noted that revisions to third-quarter GDP could still change the final ratio.
Deficits this large are unusual outside of wars, recessions and emergencies, the Journal reported. The Social Security Trustees project that the retirement trust fund will run out in 2032. After that, only 78 percent of scheduled benefits could be paid unless Congress acts.
What the federal debt outlook shows next
The Congressional Budget Office projects the ratio of federal debt held by the public to GDP will reach 120 percent by 2036 if current policies remain in place. That forecast, from the office’s February baseline, also puts annual deficits at 3.1 trillion dollars, or 6.7 percent of GDP, by 2036.
Congressional Budget Office Director Phillip Swagel spoke at an event this month. As reported by the Journal, he said: “I think there is understanding about the challenging fiscal trajectory. Of course, the difficulty is that the U.S. is a divided country and a divided society and we’re divided politically.”
Federal debt held by the public stood at 32.2 trillion dollars on September 30, equal to 100.03 percent of GDP, with a deficit of nearly 2 trillion dollars for the year.