The US federal government's budget deficit for the first 11 months of this fiscal year reached 1.96 trillion US dollars, one of the highest levels on record. Data released by the Ministry of Finance on Friday showed that in the 11 months ending August, the deficit fell slightly from $1.97 trillion in the same period in 2025. Looking at August alone, the deficit gap was US$166.8 billion. The last month of the fiscal year usually records a surplus due to corporate tax payment deadlines. Part of the widening deficit is due to rising interest expenses on debt, while rising US bond yields are also one of the reasons interest costs are rising. According to Treasury Department data, by the end of August, the average interest rate on tradable US Treasury bonds had risen to 3.48%, more than 2 percentage points higher than five years ago. As low-yield bonds expire one after another, the Ministry of Finance has to refinance at a higher cost, and this average interest rate is expected to continue to rise.

The US federal government's budget deficit for the first 11 months of this fiscal year reached 1.96 trillion US dollars, one of the highest levels on record. Data released by the Ministry of Finance on Friday showed that in the 11 months ending August, the deficit fell slightly from $1.97 trillion in the same period in 2025. Looking at August alone, the deficit gap was US$166.8 billion. The last month of the fiscal year usually records a surplus due to corporate tax payment deadlines. Part of the widening deficit is due to rising interest expenses on debt, while rising US bond yields are also one of the reasons interest costs are rising. According to Treasury Department data, by the end of August, the average interest rate on tradable US Treasury bonds had risen to 3.48%, more than 2 percentage points higher than five years ago. As low-yield bonds expire one after another, the Ministry of Finance has to refinance at a higher cost, and this average interest rate is expected to continue to rise.