US national debt reaches 100% of GDP for the first time since 1946 as Fitch warns the fiscal outlook stays strained

The US national debt reached 100% of gross domestic product for the fiscal year that ended on 30 September, hitting the triple-digit mark for the first time since 1946¹.

Surging borrowing lifted the year-end debt ratio to its highest level since 1946¹.

Debt held by investors exceeded 100% of GDP for the first time since World War II, the first such reading in 80 years^2,3.

The federal deficit for fiscal year 2026, covering October 2025 through September 2026, expanded to around $2 trillion⁹.

The Congressional Budget Office projects that Social Security’s trust funds could be depleted as early as 2032^2,3. The CBO also estimates that the annual deficit will reach $3.1 trillion by 2036⁴.

Why it matters to investors

Fiscal deterioration has become the main headache for investors as the midterms approach⁶.

Fitch Ratings warned on Wednesday that the US fiscal outlook is likely to remain strained regardless of the midterm results, and that interest payments threaten to further increase government debt⁷.

Rising Treasury yields and interest payments are part of what is driving a $40 trillion debt problem that economic growth may not solve⁵.

The concern has spread beyond the US: Canada’s central bank chief issued a rare warning about the US fiscal deficit⁹.

Wall Street is preparing for Democratic gains in the midterms, and a debt ceiling standoff, or a first-ever default on federal debt, could be particularly damaging⁸.

A split Congress could make talks over the recurring debt ceiling issue more difficult, and such clashes are seen as a greater threat to the market⁶.

What to watch

The midterm elections will decide the shape of the Congress that must handle the debt ceiling, the issue market watchers see as the bigger near-term threat^6,8.

Fitch’s view that the outlook stays strained whatever the result points to continued pressure from interest costs⁷.

Treasury yields remain a channel through which higher debt feeds back into the budget, via rising interest payments⁵.

The CBO’s projections on Social Security and on deficits reaching $3.1 trillion by 2036 frame the longer-term debate that the next Congress will inherit^2,4.

Any further warnings from rating agencies or foreign central banks would add to scrutiny of US public finances^7,9.