Macro EconomyMedium•9 October 2026•
1 min read
US Budget Deficit Projected to Reach $2 Trillion in Fiscal Year 2026
Key Facts
1A Congressional Budget Office report shows the federal budget deficit approaching $2 trillion for fiscal year 2026.
2Interest payments on US national debt have now surpassed total defense spending.
A Congressional Budget Office report shows the federal budget deficit approaching $2 trillion for fiscal year 2026. FOX Business reported that interest payments on US national debt have now surpassed total national defense spending, signaling a significant shift in fiscal priorities.
Economists attribute the surge to high interest rates making debt servicing more expensive than military spending, alongside sustained federal spending levels. This fiscal outlook follows recent economic data showing the US unemployment rate at 4.2% on October 2, 2026, while non-farm payrolls added only 29,000 jobs on the same date.