US deficit nears $2T, debt tops $40T as debt service hits record

The US federal budget deficit approached $2 trillion in the last fiscal year, with debt service costs at a historic high and total public debt surpassing $40 trillion for the first time. This marks a continued fiscal deterioration, raising concerns about long-term debt sustainability and potential pressure on Treasury yields. The development is significant for markets as it may influence investor sentiment on US fiscal policy and interest rates.

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