Federal debt surpassed GDP for fiscal 2026

The national debt topped the entire gross domestic product (GDP) for fiscal 2026, according to new data from the Bureau of Economic Analysis (BEA).

From the fourth quarter of 2025 through the third quarter of this year, the country’s economic output was more than $32.2 trillion, according to the BEA’s non-seasonally adjusted statistics .

As of Sept. 30, the final day of the third quarter, debt held by the public was more than $32.4 trillion, per the Treasury Department . Debt held by the public is what the federal government owes to outside entities, including banks, state and local governments and foreign nations.

The total national debt, which combines debt by the public with debt the federal government owes to itself, was more than $40.5 trillion as of Wednesday.

The national debt crossed the $40 trillion threshold in August, up from roughly $5.7 trillion at the turn of the century and $36.2 trillion at the start of President Trump’s second term.

The debt-to-GDP ratio for fiscal 2026 of less than 100.1 percent is lower than the nonpartisan Congressional Budget Office’s (CBO) February projection of 101 percent.

But the CBO projects that the ratio will balloon to 120 percent in 2036, surpassing the record of 106 percent reached in 1946, just after World War II ended.

“Measured as a percentage of GDP, federal outlays exceed their 50-year average by a widening margin from 2026 to 2036 in CBO’s projections,” the CBO noted earlier this year. “Revenues rise just above their 50-year average in 2026 and remain slightly above that historical average throughout the 10-year period.”

The One Big Beautiful Bill Act, which Trump signed into law in July 2025, will add $4.7 trillion to the national debt through 2035, the CBO projected in February. That law raised the country’s statutory debt limit to $41 trillion, up from $36 trillion previously.

Mounting government debt and economic uncertainty amid the Iran war have sent bond yields soaring this year , pushing up borrowing costs for Americans.

The 10-year U.S. Treasury bond yield , while down from Thursday, is more than 90 basis points higher than it was the day before the U.S. and Israel launched the Iran conflict .

The yield on the longer-term, 30-year Treasury bond , meanwhile, is trading at nearly 5.31 percent as of late Friday afternoon — an increase of roughly 68 basis points from the day before the war began.