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US national debt crossed $40 trillion in 2026, and annual interest payments surpassed $1 trillion for the first time. The yield on 30-year US Treasury bonds reached 5.33% on August 18, 2026, the highest level since 2007.
The UK is in a similarly uncomfortable position. Gilt yields approached 6%, a level not seen since 1998, and net debt interest for 2026/27 is estimated at £109 billion.
France faces projected debt-servicing costs of around €59 billion in 2026, while Italy is on a trajectory where interest payments could consume roughly 9% of government revenue by 2028. Japan’s long-term yields are approaching 30-year highs as global borrowing cost pressures bleed across borders.
Across the G7 as a whole, interest payments have exceeded defense spending in most member nations since 2024.
Developed-market general government debt is projected to rise by $4.2 trillion to reach $75.8 trillion by the end of 2026, equivalent to roughly 104% of GDP. Most G7 nations are at or above the 100% debt-to-GDP threshold. Germany remains the notable exception, having maintained stricter constitutional limits on deficit spending.
For investors, rising yields on sovereign debt create a genuine alternative to equities for the first time in over a decade. A 5.33% yield on a 30-year US Treasury is a real return that risk-averse institutions, pension funds, insurers, and endowments will find increasingly attractive.
Italy’s trajectory toward 9% of revenue consumed by interest by 2028 is particularly worth watching. Italy is the eurozone’s third-largest economy, and its debt dynamics have periodically tested the resilience of the single currency project.
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