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US federal budget deficit set to hit $2 trillion in 2026, a historic high outside major recessions.

Market News
20 May 2026
Fox Business
View Source
Bearish
pluang ai news

The US federal government is projected to run a budget deficit of around $2 trillion in fiscal year 2026, according to estimates from the Treasury Department and bond market participants. This figure surpasses the previous $1.8 trillion deficit from last year and is one of the largest in US history outside of major recessions, trailing only the COVID-19 pandemic years. Rising costs from entitlement programs like Social Security and Medicare, along with increasing interest expenses on the national debt, are driving the deficit higher. Experts warn that this unsustainable borrowing trend raises the risk of a fiscal crisis and urge urgent deficit reduction measures. Additionally, the US national debt recently surpassed the size of the economy for the first time since World War II, highlighting growing fiscal challenges ahead.

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