The United States' federal interest burden has climbed to a new record, surpassing even the 1991 peak, and analysts warn that the risks of servicing the country's ever-growing national debt are far higher today than they were 35 years ago.

An analysis from investment management firm Doubleline found that in 2025, federal net interest payments on the U.S.'s now-$40 trillion national debt reached 18.5% of revenue, exceeding the previous record of 18.4% set in 1991. In practical terms, the U.S. is collecting nearly 19% of all taxes and other revenue just to service interest on its ballooning debt—equivalent to $1.25 trillion per year, more than the entire 2026 defense budget.

Rising interest payments feed a self-reinforcing cycle: the government must borrow more simply to cover interest costs, leaving less fiscal room for infrastructure, education, and other growth-driving investments. The dynamic is amplified by the need to continually refinance maturing debt: because Treasuries roll over regularly, newer issuance reprices at prevailing rates, so even a stable rate environment can keep pushing interest costs higher as older, lower-yielding bonds mature.

The cost of servicing America's debt has swelled over the past decade as interest rates rose. According to global market commentator the Kobeissi Letter, citing the Congressional Budget Office, interest expense as a percentage of revenue has tripled since 2015 and is projected to climb to 25% by 2036.

"The US debt crisis is in uncharted territory," the Kobeissi Letter wrote on social media. "These projections assume no major slowdown, recession, or significant rise in Treasury yields over this period."

The fiscal trajectory has already drawn responses from credit rating agencies: Fitch downgraded the U.S. sovereign rating in 2023, and S&P had done so in 2011, both citing in part concerns about debt and governance—an backdrop that adds weight to the current debate over interest costs.

Why today's interest burden differs from the 1991 record

In 1991, the U.S. economy was recovering from a recession and the oil shocks of the Gulf War. Strong demand for bonds at the time pulled 30-year Treasury yields down to roughly 8%, from more than 10% in prior decades.

Today's picture is different, Doubleline argued. The government could manage an 8% interest rate when the debt was smaller, but no longer. In 1991, debt held by the public stood at about 44% of U.S. GDP; today it has topped $32 trillion, more than 100% of GDP. Even at lower rates, the sheer size of the debt consumes a greater share of the budget.

"The federal government has reached a record interest burden with the long bond nowhere near a record yield," the analysts wrote. "The yield itself might look ordinary by historical standards, but the government's sensitivity to it is not."

Complicating matters, major technology companies—particularly hyperscalers—are turning to debt markets, with AI giants issuing $225 billion in bonds in the first half of 2026. Much of this capital expenditure is tax-deductible, which may worsen the national debt, and the borrowing runs counter to the usual pattern of private companies pulling back when the government is borrowing heavily. The long-term capital needed for the AI buildout has pushed tech giants toward 10-to-30-year bonds, straining U.S. finances and pressuring the government to pay higher yields to sustain bond demand.

"Capital flowing into corporate bonds is capital not flowing into Treasuries, and Treasury yields have had to rise to clear the market," economist and Wall Street veteran Ed Yardeni wrote in a recent note. "In short, the AI revolution is producing a classic crowding-out effect, causing Treasury yields to rise."

In an effort to steady the bond market, U.S. Treasury Secretary Scott Bessent doubled the size of the Treasury's buybacks of 10-to-30-year bonds, from $2 billion to at least $4 billion per operation—a move that surprised investors and marked a rare direct intervention by the head of the Treasury. To Doubleline's analysts, the strategy blurred the line between cash management and market control, underscoring how critical the moment is for how the U.S. manages interest on its debt.

"Net interest expense has already reached a record share of revenue, while the Treasury continues to finance large deficits in a market with heavy private demand for capital," the analysts said. "That makes the level of the long bond more consequential than the historical comparison alone suggests."