Budget Deficit Hits $1.5T as Fiscal Year Nears End

The interest burden on outstanding U.S. debt remained a major drag on the budget.

Interest costs in the first 10 months of the fiscal year totalled $956 billion, up 32% from 2023.

The Federal Reserve’s aggressive interest-rate hiking campaign, aimed at quelling inflation, has made debt more expensive to issue for the federal government.

The weighted average interest rate on outstanding U.S. interest-bearing government debt was 3.33% at the end of July — the highest since January 2010 and up about half a percentage point from a year before.

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