US Annual Budget Deficit Widens to $1.992 Trillion in Fiscal Year 2026

The United States federal budget deficit reached $1.992 trillion for fiscal year 2026, marking the highest annual shortfall in five years and equivalent to roughly 6.2% of GDP. The shortfall widened from $1.775 trillion in FY2025, driven largely by gross interest payments on the national debt, which jumped 12% year-over-year to a record $1.36 trillion. In September 2026, the government posted a $27 billion monthly deficit, down from a $198 billion surplus in September 2025. Total U.S. national debt has now surpassed $40 trillion, raising market concerns over elevated borrowing costs.