The US national debt crossed $40 trillion for the first time on August 18, 2026, landing at $40.047 trillion according to Treasury Department figures. That number climbed by roughly $60 billion in a single day.
Rebecca Patterson, senior fellow at the Council on Foreign Relations and former chief investment strategist at Bridgewater Associates, appeared on Bloomberg’s “Bloomberg Money” on August 21 to make the case that Washington’s pattern of ignoring its fiscal situation is no longer a long-term problem. It’s a present one.
How we got here
The total has more than doubled since early 2017, when it stood near $19.95 trillion, and it has surged by roughly one-third in less than five years.
The drivers are familiar: persistent federal deficits, spending on social programs and defense, interest costs that compound as rates stay elevated, and the lingering fiscal hangover from pandemic-era relief measures.
Patterson’s concern isn’t just the headline number. It’s the trajectory. Without substantial policy changes, she warned, debt-to-GDP ratios could reach 118% or higher within the next decade.
Why Patterson’s warning carries weight
Patterson spent years as the chief investment strategist at Bridgewater Associates, one of the world’s largest hedge funds. Her background also includes over 15 years at JPMorgan and tenures as CIO at Bessemer Trust.
Former Treasury Secretary Janet Yellen has previously raised alarms about the trajectory of US fiscal policy, warning of effects that could bleed into monetary policy decisions.
Patterson and others flagged the dynamic of fiscal dominance explicitly in the 2025-2026 period, as elevated interest rates began to visibly inflate the government’s debt-servicing costs.
What this means for markets and beyond
For Treasury markets, the $40 trillion milestone lands during a period of already-heightened uncertainty about demand for US government debt.
Interest payments on the national debt have already become one of the largest line items in the federal budget, competing with defense and entitlement programs for spending priority. A debt-to-GDP ratio approaching 118% would make that competition significantly more acute.