What’s happening with the national debt — and how it could affect your wallet

• The US national debt topped $40 trillion this week, potentially impacting consumer interest rates.
• Treasury Secretary Scott Bessent is using debt buybacks to manage high bond yields.
• Rising federal debt since 2015 has increased loan costs and could continue to impact consumer loans.

Owing $40 trillion might sound daunting. But for the American government, ballooning debt has become the new business as usual — even if it takes a bite out of consumers’ wallets.

On Wednesday, the Treasury Department announced that the national debt had reached over $40 trillion, up by more than $11 trillion over the last five years.

Also this week, Treasury Secretary Scott Bessent stepped in to try to ease skyrocketing yields — the 30-year US Treasury yield hit its highest level since June 2007, as investors looked to offload bonds amid continued oil price uncertainty.

Bessent took some unexpected direct action, implementing debt buybacks on longer-term federal debt, which temporarily eased yields, although they’ve crept back up in the following days. Bessent indicated that new tariff revenue could take a bite out of the deficit, and also signaled that the administration could continue those buybacks.

“Actions like these can make a modest difference for rates in the short term, but only reducing deficits will provide the long-term fix,” Caleb Quakenbush, the director of fiscal policy at the Bipartisan Policy Center, said.

The growing federal debt could hit Americans in their pockets. As the federal government’s debt load grows, lenders may seek higher interest rates to compensate for higher risk. That in turn can push up interest rates on the larger purchases that are most important to many consumers — think mortgages and auto loans.

“Our nation’s lenders, concerned about the lack of a plan to get our fiscal house in order, are asking taxpayers to pay more for what government borrows,” Quakenbush said. “That also raises the cost of debt for everyone else. If a mortgage is out of reach, or financing for your business has gotten more expensive, the debt is part of the reason.”

The Yale Budget Lab found that when lawmakers raise deficits without measures to offset those costs, interest rates tend to grow. Their model — which looked at the increase in federal debt from 2015 through 2025, and tracks the impact of fiscal policy on interest rates and loans as of the third quarter 2025 — finds that the federal debt growth over that period raised annual costs by $2,500 for the median home mortgage and $120 for the average auto loan.

“While $40T itself is hard to conceptualize in total, per person it’s upwards of $100k,” Abhi Gupta, the author of the Yale analysis, said. “In the same way homeowners take seriously the responsibility of making their mortgage payments, the national debt is large enough to deserve a similar level of consideration — both because any realistic plan to bring it down involves tradeoffs and because its growth makes all sorts of other borrowing more expensive too.”