All articles tagged with #deficit
U.S. Treasuries whipsawed as the Treasury doubled long‑term buybacks to curb borrowing costs, with 30‑year yields briefly near 5.3% before retreating, amid a record ~$40 trillion national debt and persistent deficits that keep supply–demand pressures in Treasuries and ripple into mortgages and corporate borrowing.
The U.S. Treasury sold $25 billion of 30-year bonds at a 5.216% yield—the highest since 2001—framed as an investor warning to Scott Bessent as deficits rise; demand was decent, but the move signals investors demand greater compensation for long-term debt and hints that yields could move higher if inflation and fiscal pressures persist, even as the Fed reduces its buying.
A Congressional Budget Office forecast shows the 2026 federal deficit rising to about $2.1 trillion, roughly $200 billion above February’s estimate, largely due to weaker tariff revenue after the Supreme Court struck down Trump-era tariffs. Tariff and customs receipts are now expected about $250 billion below earlier projections, with about $100 billion of collected tariff duties already refunded. In the first 10 months of fiscal 2026 the deficit was $1.8 trillion as outlays grew $308 billion and revenues rose $139 billion, aided by a July payment shift; spending on Social Security, Medicare and Medicaid accounted for most of the increase, and net interest payments rose by $117 billion, prompting economists to warn that borrowing could exceed $2 trillion this year.
The U.S. July budget gap rose to $432.3 billion, the largest for a July since March 2021, as a surge in Medicare costs and ongoing debt financing pushed the year-to-date shortfall toward about $1.8 trillion, surpassing the pace of 2025. Medicare July outlays were $174 billion (totaling $955 billion for the year), with Social Security at $141 billion and net interest at $104 billion in July. Timing effects — including a $99 billion nonbusiness-day acceleration — and $33 billion in tariff refunds also boosted outlays. Through ten months, debt financing remains a major expense; the government has paid $1.17 trillion on a $39.9 trillion debt, about $931 billion in net interest year-to-date, with $32.1 trillion held by the public.
Sen. Ron Johnson (R-Wis.) is set to chair the Senate Budget Committee after Lindsey Graham’s death, tasked with pressing deficit-reduction priorities as the GOP debates a third reconciliation bill to fund the Iran war and other priorities. A longtime fiscal hawk, Johnson says he’ll broker consensus across the conference and insists on offsets, even as intra-party divisions complicate the path forward; his leadership could be short if Grassley takes the gavel next year.
US budget data show it has refunded about $81 billion in tariffs collected before a Supreme Court ruling struck down much of Trump’s tariffs, with most refunds issued in May–June; the refunds followed the court decision, and the deficit has begun growing again to about $1.367 trillion in the first nine months of the year, as interest on the debt and military spending rose amid the Middle East war. The 10% global tariff is due to expire July 24, with the White House weighing new duties over anti-forced labor enforcement and excess capacity.
US Treasury data show tariff refunds to businesses jumped to about $49.1 billion in June, accelerating after the Supreme Court struck down broad Trump-era tariffs and a refunds portal opened in late April. June refunds far outpaced tariff revenue for the period (~$23.6B; May was ~$21.9B on both sides of the ledger). An estimated $166 billion in tariffs (plus interest) could be eligible for refunds, with the refund program expanding exposure to more scenarios and exemptions. The broader budget picture remains weak, with sizeable deficits likely to continue this year.
Nine months into FY2026, the U.S. Treasury is borrowing about $155 billion per month (roughly $39 billion per week) while net interest on the public debt runs at about $857 billion for the year (around $23.8 billion per week). The national debt stands near $39.4 trillion, and rising Social Security, Medicare and Medicaid costs are pushing deficits higher, prompting calls for entitlement reforms and higher revenues to avert an unsustainable fiscal path.
Nine months into FY2026, the U.S. deficit reached about $1.4 trillion as outlays ($5.5 trillion) surpassed receipts ($4.2 trillion). Most of the shortfall stems from entitlement programs (Social Security, Medicare, Medicaid) and reduced corporate tax revenue tied to policy changes, while individual taxes rose. The debt surpassed 100% of GDP and interest payments neared $1 trillion, prompting calls for entitlement reform and a bipartisan plan to restore fiscal sustainability.
Mortgage rates near 6.48% are driven more by a surge in federal borrowing (a $3.4 trillion deficit through 2034) and rising Treasury yields than by the Fed’s policy. Long-term rates follow 10-year yields and are shaped by inflation expectations and prepayment risk in mortgage-backed securities, so rates can stay elevated even as the Fed cuts rates. Historically, 6–8% has been common outside the low-rate era, so today’s level reflects broader market forces rather than the Fed alone.
Gavin Newsom unveils a slimmer general fund budget aimed at keeping California deficit-free through 2028, pairing lower outlays with targeted tax changes to shore up long-term liabilities while balancing labor and business needs ahead of a potential 2028 presidential bid.
Elon Musk, joining other financiers, endorses Warren Buffett’s 2011 proposal to bar sitting members of Congress from reelection if the federal deficit exceeds 3% of GDP—a plan that would require a constitutional amendment—and comes as the U.S. debt nears $40 trillion and deficits persist, though its political path remains uncertain.
Romania's parliament voted to oust Prime Minister Ilie Bolojan in a no-confidence motion after the ruling coalition fractured when the Social Democrats abandoned the alliance; austerity measures to shrink the budget deficit were disputed, and President Nicusor Dan will try to form a new government, while markets fret as the leu sinks to new lows ahead of elections due in 2028.
Canada’s spring economic update forecasts about 2% growth this year and a deficit near C$67 billion, with Prime Minister Mark Carney steering toward reduced U.S. dependence through a 26-billion CAD sovereign wealth fund and new programs to train construction workers and fund apprenticeships, financed in part by higher oil revenues despite tariffs affecting some sectors.
Canada announced the Canada Strong Fund, its first sovereign wealth fund, with an initial C$25 billion to invest in energy, infrastructure, mining, agriculture and technology, and to accept direct Canadian investments; intended to spur growth amid US tariff pressures, but critics warn returns may be limited and funding could come from borrowing given the deficit; the government will hold consultations on the fund’s details.