The national debt's interest payments surpassed $1 trillion as the deficit grew.

• The Federal Reserve has kept benchmark rates at their highest in 23 years, resulting in the government spending $1.049 trillion on debt service, which is a 30% increase from the previous year.
• The surge in the U.S. budget deficit in August resulted in a jump in debt service costs, bringing the full-year deficit closer to $2 trillion.

For the first time, the U.S. government has spent over $1 trillion this year on interest payments for its $35.3 trillion national debt, according to the Treasury Department's report on Thursday.

The Federal Reserve has kept benchmark rates at their highest in 23 years, resulting in the government spending $1.049 trillion on debt service, a 30% increase from the previous year, and part of an estimated $1.158 trillion in payments for the entire year.

The government's net interest payments have exceeded all other categories except Social Security and Medicare, totaling $843 billion.

The surge in the U.S. budget deficit in August resulted in a jump in debt service costs, bringing the full-year deficit closer to $2 trillion.

The August shortfall for the federal government's fiscal year decreased by $380 billion, a significant change from the $89 billion surplus recorded in the same month the previous year, which was mainly due to accounting adjustments related to student debt forgiveness.

The 2024 deficit was reduced to just under $1.9 trillion, a 24% decrease from the previous year.

Although the Fed is predicted to decrease rates by a quarter percentage point next week, Treasury yields have dropped significantly in recent weeks in anticipation of further actions in the future months.

Since early July, the benchmark has decreased by more than three-quarters of a percentage point, from a yield of approximately 3.7%.