The U.S. Treasury’s total Federal debt will reach $40 trillion (about $32 trillion publicly held) in approximately two weeks, and it has raised its estimate of new debt to be issued in the third quarter of 2026, from $671 billion (estimated in May) to $739 billion.
With that increase caused primarily by lower projected cash flows, the debt increase shows no sign of falling below $2 trillion/year.
Meanwhile the Treasury continues to increase the share of new debt that it is issuing in very short-term forms, 52 weeks or less; that share is now well over 20% overall, and during most of President Trump’s second term, has been a majority of new debt.
Treasury Secretary Bessent’s “strategy,” if one can call it that, has been to hold back issuance of longer-term Notes until their interest rates fall; but on the contrary, they have continued to rise since Trump took office, and constantly rolling over such short-term debt in the context of rising rates means paying more interest, not less.
