U.S. current account deficit widens to $246 billion; income paid to foreign investors hits a record

The U.S. current account deficit widened by $33.4 billion, or 15.7%, to $246.0 billion in the second quarter, the Bureau of Economic Analysis reported on Thursday. That equals 3.0% of GDP, up from 2.7% in the first quarter, and is the largest gap since the third quarter of 2025, when it was $262.9 billion.

Most of the widening came from goods. The goods trade deficit rose $40.4 billion to $291.3 billion as imports climbed $67.4 billion to $931.6 billion. Goods exports also rose, to a record $640.3 billion, but not by enough to keep pace. The services surplus was little changed at $91.5 billion.

The number behind the number: the interest bill

The headline is about trade. The line worth watching this week is primary income, which is what the U.S. earns on its investments abroad minus what it pays foreigners on their holdings of U.S. stocks, bonds and companies.

BEA's historical comparison table shows no quarter with higher payments to foreigners. As recently as the fourth quarter of 2025 the balance was a surplus; it has now been negative for two straight quarters.

The reason is the size of what foreigners own. BEA puts the U.S. net international investment position at minus $22.42 trillion at the end of June, deeper than minus $21.27 trillion three months earlier. U.S. liabilities to the rest of the world total $69.39 trillion. When interest rates rise, the income the U.S. pays on the interest-bearing part of that pile rises with them.

Why it matters with yields where they are

This data covers April through June. Since then long rates have kept climbing. The Treasury's daily yield curve put the 10-year at 5.11% and the 30-year at 5.40% on Wednesday, and CNBC reported the 30-year rising to its highest level since 2004 on Thursday. Every quarter at those yields adds to what the U.S. owes foreign holders, which pushes the income line further into deficit.

The same release shows how much the U.S. leans on foreign money. Foreign purchases of U.S. assets, recorded as new U.S. liabilities, were $978.9 billion in the quarter, the most since the first quarter of 2020. Net borrowing from abroad was $369.7 billion.

That is the link to the current bond selloff. A country that needs nearly a trillion dollars a quarter of foreign buying has to offer yields those buyers accept. When they hesitate, as the weak demand at this week's five-year auction suggested, the price of that money goes up.

Who feels it

Borrowers with floating-rate debt are not directly affected by the current account, but they are affected by the same long-rate pressure behind it. See our 10-year Treasury chart and today's jobless claims and yields story.

Importers drove the goods gap. The $67.4 billion jump in goods imports in one quarter is the largest since early 2025, according to BEA's comparison table.

BEA's next release, covering the third quarter, is due Dec. 18.

Sources: U.S. Bureau of Economic Analysis; U.S. Treasury; CNBC. This is market information, not investment advice.