US net interest spending hit record $1.05T in fiscal 2026, up over 8%

The milestone matters less for the headline total than for what it signals about fiscal capacity: interest is now a structural claim on revenue that competes directly with discretionary spending, and the Peterson Foundation's 3.2%-of-GDP estimate suggests the burden has returned to levels last seen in 1991. This affects anyone holding duration-sensitive assets, since a government with less fiscal room has a narrower toolkit when shocks arrive. The open question is whether quarterly GDP data later this month confirms the ratio — and whether the trajectory keeps compressing that room.