The average interest rate the federal government pays across its entire interest-bearing debt reached 3.580% on October 31, 2026, the highest monthly reading since April 2009. Treasury’s Fiscal Data service published the figure in its monthly average-interest-rate release this week, up from 3.531% at the end of September and 3.355% in October 2025. The single largest contributor was Treasury bills, where the average rate jumped 14.4 basis points in one month to 4.014%, the first reading above 4% since October 2025. Applied to the $40.52 trillion of debt outstanding on October 31, a 3.580% average rate works out to roughly $1.45 trillion in annual interest. The reading matters because it is the closest thing Treasury publishes to a true cost-of-funds number, and it moves slowly in only one direction once short-term rates rise. Bills reprice in weeks. Notes and bonds issued at 2020 and 2021 coupons mature and get replaced at today’s levels, which pushed the note average up 27.5 basis points over the past year. Our interest on the national debt tracker follows the running total, and the current prime rate page tracks the short-term benchmark that drives the bill side of the calculation.
- The debt’s average interest rate hit 3.580% on October 31, highest since April 2009.
- Treasury bills now average 4.014%, their first reading above 4% in twelve months.
- Bills cost 61.5 basis points more than notes and 53.1 more than 30-year bonds.
- At 3.580%, the $40.52 trillion debt implies about $1.45 trillion of annual interest.
- The prime rate held at 7.00% through November 4, per the Fed’s H.15 release.
What the October Release Showed
Treasury reports the average rate on each class of security it has outstanding, then blends them into a single figure for all interest-bearing debt. The October 31 blend came in at 3.580%, a gain of 4.9 basis points from September’s 3.531% and 22.5 basis points from the 3.355% recorded a year earlier. Within the marketable categories, the average rate on Treasury notes rose to 3.399%, bonds to 3.483%, floating rate notes to 4.170%, and inflation-protected securities to 1.227%. Total marketable debt averaged 3.570%. Non-marketable holdings, which are dominated by the Government Account Series the Social Security and other federal trust funds own, averaged 3.630%.
The composition of the debt explains why the blended number keeps grinding higher. Treasury’s Monthly Statement of the Public Debt put bills at $7.38 trillion on October 31, notes at $16.34 trillion, bonds at $5.56 trillion, inflation-protected securities at $2.16 trillion, and floating rate notes at $708 billion. Bills are now 22.96% of the $32.15 trillion marketable total. Every one of those categories is priced off a different part of the curve, and only bills and floating rate notes track the Fed’s policy rate closely. The rest carry fixed coupons set on the day they were sold, which means the average rate on notes and bonds rises only as older paper matures and new paper replaces it at prevailing yields.
Why Bills Crossed Back Above 4%
The bill average had spent eleven consecutive months below 4%, bottoming at 3.690% in May 2026 before turning higher over the summer. It cleared the line in October at 4.014%. The mechanism is straightforward: the Federal Reserve raised its policy rate in September, lifting the prime rate to 7.00% from 6.75%, and held it there at the October 27 and 28 meeting. The effective federal funds rate printed at 3.88% through November 4 and the discount window primary credit rate at 4.00%, per the Fed’s H.15 release published November 5. Bills mature in a year or less, so the entire $7.38 trillion stock reprices to those levels within four quarters.
Auction results show the repricing in progress. Bills issued November 5 cleared at 3.940% for the six-week, 4.040% for the 13-week, and 4.150% for the 26-week. Bills issued November 10 cleared at 3.890% for the four-week, 3.975% for the eight-week, and 4.090% for the 17-week. Each of those settles above the 4.014% stock average at the longer tenors, which means the average has further to climb even if the Fed does nothing at its December meeting. One useful way to size the effect: the 14.4 basis point move in the bill average over a single month, applied to $7.38 trillion, adds roughly $10.6 billion to annual interest on its own. Our current national debt page tracks the principal that cost is calculated on, which stood at $40.55 trillion on November 4.
The 2009 Comparison, and Why It Is Different
April 2009 was the last month the blended average sat at or above 3.580%, at 3.587%. The debt then was roughly $11 trillion. It is $40.52 trillion now, which is the whole point of the comparison. The same percentage rate applied to a stock almost four times larger produces a vastly different dollar bill. Treasury’s own data put debt held by the public at $32.77 trillion on November 4 and intragovernmental holdings at $7.79 trillion, and the interest on the public portion is money that leaves the government and goes to bondholders rather than circulating between federal accounts.
There is a second difference. In 2009 the average rate was falling fast, dropping from 4.009% in October 2008 to 3.587% by April and continuing down for most of the following decade. The direction now is the opposite. Fourteen of the last fifteen monthly readings have been higher than the one before. The Fed’s balance sheet adds a further wrinkle: Reserve Bank credit stood at $6.75 trillion on November 4, and the roughly $4.58 trillion of Treasury securities the Fed holds remit their interest back to the Treasury as surplus earnings, which offsets part of the gross cost. That offset has shrunk as the Fed’s own funding costs have risen.
What Changes for Your Money
Nothing in this release changes a consumer rate directly. The average rate on the federal debt is a backward-looking accounting measure, not a benchmark any lender uses. The number that reaches household borrowing is the prime rate, which sat at 7.00% through November 4 and sets the floor for most variable-rate credit card APRs, home equity lines, and many small-business loans. Our Fed prime rate dashboard and consumer credit rates dashboard both update as that benchmark moves.
Where the release does carry a signal is in what it says about persistence. A government whose average cost of funds is still rising twelve months after short rates peaked is a government operating in a higher-for-longer rate environment, and the same conditions keep deposit and loan pricing elevated. The 10-year Treasury yield, which anchors fixed mortgage pricing more tightly than the prime rate does, closed at 4.90% on November 4 with the 10-year to 2-year spread at 0.38 percentage points on November 5. Savers get the better side of this: top yields on high-yield savings accounts and certificates of deposit track short Treasury bills closely, and bills averaging above 4% is the same force that keeps those APYs competitive. Borrowers comparing current mortgage rates or shopping personal loan rates today should price a flat benchmark into their planning rather than an imminent decline.
If you hold cash you will not need for six to twelve months, the bill curve is telling you where to put it. The 26-week bill issued November 5 cleared at 4.150% while the four-week cleared at 3.890%, a 26 basis point premium for locking up the money a little longer. Compare that spread against your bank’s CD ladder before you commit. Treasury bills are state-tax-exempt in most states, which can widen the gap further depending on where you file.
Frequently Asked Questions
What is the average interest rate on the national debt right now?
The average interest rate on all U.S. interest-bearing federal debt was 3.580% as of October 31, 2026, according to Treasury’s Fiscal Data release. That is up from 3.531% in September and is the highest monthly reading since April 2009. Treasury bills within that total averaged 4.014%, notes 3.399%, and bonds 3.483%.
How much does the US pay in interest?
Treasury reported $40.52 trillion of debt outstanding on October 31, 2026, carrying a blended average rate of 3.580%. Multiplying those two figures gives an annual run rate of roughly $1.45 trillion. The amount Treasury actually records in a given year differs from that arithmetic, because securities are issued and retired continuously and because the Federal Reserve remits interest on its own Treasury holdings back to the government. Treasury publishes the realized figure monthly in its interest expense dataset, and the running fiscal-year total is tracked on our interest on the national debt page.
Why does government debt increase interest rates?
Heavy issuance can push yields up, but the causation runs mostly the other way in the current data. Treasury does not set the rates it pays. It auctions securities and accepts whatever yield clears the market, and that clearing yield is anchored by the Federal Reserve’s policy rate at the short end and by inflation and term-premium expectations further out. When Treasury sells more debt than buyers want at prevailing levels, auctions clear at slightly higher yields, which is a real effect but a secondary one. The 7.00% prime rate and the 3.88% effective federal funds rate are doing the heavier lifting.
Why are Treasury bills paying more than 30-year bonds?
The 4.014% bill average and the 3.483% bond average are not market yields on comparable terms. They are the average coupons on two stocks of debt issued at different times. The bond figure is weighted toward 30-year paper sold between 2010 and 2021 at coupons near 2% to 3%, which drags the blend down and will keep doing so for decades. The bill figure reflects paper sold in the last twelve months at today’s policy rate. Current market yields are a different picture: the 10-year closed at 4.90% on November 4.
What does a higher average rate on the debt mean for my loans?
No lender prices off this figure, so your APR does not move when it is published. Treat it as confirmation of the rate environment rather than a trigger. A still-rising government cost of funds twelve months after short rates peaked is evidence that the elevated-rate period has staying power. For a variable-rate credit card or home equity line, that argues for paying down principal rather than waiting for the prime rate to fall. For a fixed-rate mortgage or auto loan, it argues against delaying a purchase on the assumption that financing gets materially cheaper within a couple of quarters.
When will the average rate on the debt stop rising?
Not while bills keep clearing above the 4.014% stock average, which they did at every tenor of 13 weeks and longer in the November 5 and November 10 auctions. Beyond the bill effect, the note and bond averages rise mechanically as low-coupon paper from 2020 and 2021 matures and gets refinanced at current yields, and that rollover has years left to run. A pause would require the Fed to cut its policy rate enough to pull new bill yields below 4%, and the October 28 decision to hold at 7.00% prime pushed that possibility out to 2027 at the earliest.
Watching the Next Two Releases
Two dates set the next readings. Treasury’s Monthly Treasury Statement for October lands in mid-November with the realized interest expense for the month, and the next average-interest-rate release arrives in early December covering November 30. The Fed’s December meeting sits between them. For ongoing tracking, the U.S. interest rates dashboard, the U.S. debt clock hub, and the Fed rate forecast for 2026 are updated as each data point posts.
References
- U.S. Department of the Treasury, Fiscal Data. “Average Interest Rates on U.S. Treasury Securities,” record date October 31, 2026. fiscaldata.treasury.gov
- U.S. Department of the Treasury, Fiscal Data. “Monthly Statement of the Public Debt: Summary of Treasury Securities Outstanding,” October 31, 2026. fiscaldata.treasury.gov
- U.S. Department of the Treasury, Fiscal Data. “Debt to the Penny,” November 4, 2026. fiscaldata.treasury.gov
- Board of Governors of the Federal Reserve System. “H.15 Selected Interest Rates,” released November 5, 2026. federalreserve.gov
- U.S. Department of the Treasury, TreasuryDirect. “Auction Announcements, Data and Results.” treasurydirect.gov
- Board of Governors of the Federal Reserve System. “H.4.1 Factors Affecting Reserve Balances.” federalreserve.gov
- Federal Reserve Bank of St. Louis, FRED. “10-Year Treasury Constant Maturity Rate (DGS10).” fred.stlouisfed.org
