$9 Trillion of the National Debt Must be Paid Back in 2026
$9 Trillion of the National Debt Must be Paid Back in 2026
Heresy Financial: 12-15-2025
The United States is on the cusp of a significant financial event: rolling over a staggering $9 trillion of national debt in 2026. This amount represents over a quarter of the country’s total debt load of $38 trillion.
At first glance, the figure may seem alarming, sparking concerns about a potential liquidity crisis or default. However, a closer examination of the facts reveals that the situation is more manageable than it initially appears.
The debt rollover involves paying back maturing debt while simultaneously borrowing new funds to replace it. Much of this debt consists of short-term Treasury bills (T-bills) with maturities within a year, as well as longer-term notes and bonds.
While the sheer size of the rollover is substantial, the government’s ability to refinance the debt is supported by the fact that most of the maturing debt is held by investors who already have cash parked in money market funds and other financial instruments heavily invested in Treasury securities.
The Federal Reserve’s recent actions have provided additional support for rolling over the debt at manageable costs. By lowering short-term interest rates and restarting quantitative easing (QE), the Fed has helped to create a favorable environment for debt refinancing.
Although current interest rates for new debt issuance are higher than the average rates on existing debt, particularly for longer-term bonds, most of the rollover is expected to be in short-term debt. This means that rates could remain stable or even decline if the Fed cuts rates further.
The government has taken a strategic approach to managing its debt by concentrating much of it at the short end of the maturity curve. This allows for greater flexibility in refinancing debt at potentially lower rates when the Fed reduces short-term borrowing costs, rather than locking in higher rates on longer-term bonds.
By doing so, the government is able to take advantage of more favorable interest rates, reducing the overall cost of borrowing.
One common misconception about debt rollover is that it involves money leaving the financial system. However, the reality is that funds simply move between accounts, often cycling through Treasury securities.
This process does not drain liquidity from the system but rather redistributes it. As a result, the risk of a liquidity crisis or default is minimal.
While the $9 trillion debt rollover is undoubtedly a significant event, it is unlikely to cause a default or sharp rise in borrowing costs.
Instead, debt maturities will continue to cluster at the short end of the curve until economic or policy changes, such as lower long-term interest rates, enable more long-term refinancing. By understanding the facts surrounding the debt rollover and the government’s strategic approach to debt management, investors and policymakers can better navigate this significant financial event.
For further insights and information, be sure to watch the full video from Heresy Financial, which provides a more in-depth analysis of the $9 trillion debt rollover and its implications for the US economy.