US public debt reached $40 trillion for the first time in history on Wednesday, August 19, according to reports from Bloomberg and The Guardian. The milestone arrives in an environment of rising yields, raising the cost of dollar financing for emerging economies.
The crossing came ahead of forecasts: in fiscal year 2026, which began in October 2025, debt added $1.8 trillion and the deficit doubled over the past decade, according to The Guardian. At the same time, annual interest payments already exceed $1 trillion and have become the second-largest line item in federal spending, behind only Social Security, according to AP. For Mexico, the signal arrives through the external financing channel: when the US Treasury pays more to borrow, international capital demands higher returns from emerging economies, and that cost pressures the trajectory of Banco de México's interest rates.
The pace accelerated in recent months: debt moved from $39 to $40 trillion in five months, according to AP. Behind this advance are tariff refunds rendered void by a judicial ruling, with more than $100 billion returned, and a 30-year Treasury yield that touched its highest level since 2007 this week. In the first ten months of the fiscal year, interest payments grew 15 percent compared to the same period the previous year, according to AP. Facing this pressure, the Treasury Department doubled its buybacks of long-term debt, to a minimum of $4 billion per operation, according to AP.
The next reference point is the debt ceiling of $41.1 trillion, which estimates cited by AP project will be reached in 2027. For the region, the key takeaway is the cost of dollar-denominated money and its effect on the external financing of emerging economies.
This article was drafted with artificial intelligence assistance from verified sources and reviewed by a human editor before publication.