The U.S. Congressional Budget Office (CBO) reported that the federal deficit is projected to surge 12% to nearly $2 trillion in fiscal 2026, marking the highest level since 2021. Government spending is expected to reach $7.4 trillion, while revenue will total just $5.4 trillion. The CBO anticipates the deficit will exceed 6% of GDP, with publicly held debt surpassing 100% of GDP. Rising Treasury yields are threatening to push borrowing costs even higher, adding pressure to an already strained fiscal outlook.