Large language models are often not just wrong, but \emph{confidently wrong}: when they produce factually incorrect answers, they tend to verbalize overly high confidence rather than signal uncertainty. Such verbalized overconfidence can mislead users and weaken confidence scores as a reliable uncertainty signal, yet its internal mechanisms remain poorly understood. We present a circuit-level mechanistic analysis of this inflated verbalized confidence in LLMs, organized around three axes: capturing verbalized confidence as a differentiable internal signal, identifying the circuits that causally inflate it, and leveraging these insights for targeted inference-time recalibration. Across two instruction-tuned LLMs on three datasets, we find that a compact set of MLP blocks and attention heads, concentrated in middle-to-late layers, consistently writes the confidence-inflation signal at the final token position. We further show that targeted inference-time interventions on these circuits substantially improve calibration. Together, our results suggest that verbalized overconfidence in LLMs is driven by identifiable internal circuits and can be mitigated through targeted intervention.