The U.S. federal budget deficit rose to $1.993 trillion in fiscal year 2026, which ended on September 30, according to data from the Congressional Budget Office (CBO). This represents a 12% year-over-year increase and is the highest level since 2021. The Wall Street Journal reported that the U.S. deficit as a percentage of GDP is projected to exceed 6%, up from 5.8% in fiscal year 2025. This level has historically only been seen during economic recessions or wartime, while the current U.S. economy has been in an expansion cycle for over six years. The CBO noted that net interest outlays, which increased by 11% year-over-year to over $1.1 trillion, were the primary driver of the expanding deficit.