U.S. gross national debt reached roughly $40.047 trillion on August 18, crossing the $40 trillion threshold for the first time, according to Treasury data. The milestone came about five months after debt passed $39 trillion in March 2026. About $32.26 trillion is debt held by the public, while $7.78 trillion consists of intragovernmental holdings owed through government trust funds such as Social Security. The fiscal deficit through July stood at $1.8 trillion, up 4% from the same period last year, partly because court rulings reduced tariff revenue expected to narrow the shortfall. Annual net interest payments now exceed $1 trillion, making them the federal government's second-largest expenditure after Social Security and larger than spending on national defense, Medicaid or any individual discretionary program. The Congressional Budget Office projects the debt-to-GDP ratio (debt compared with economic output) will rise from 101% in 2026 to 120% by 2036 if current trends continue. A $41.1 trillion statutory debt limit could be reached as early as 2027. Higher debt can pressure bond yields and increase borrowing costs across mortgages, corporate debt and consumer credit, while previous debt-ceiling standoffs in 2011, 2013 and 2023 produced volatility across asset classes, including crypto.