The numbers: The U.S. federal budget deficit widened sharply to $227.76 billion in June, up from $88.8 billion in the same month last year, the Treasury Department said Thursday.
For the first nine months of the fiscal year, the deficit was $1.39 trillion, up from $515.1 billion in the same period last year.
Key details: In June, government receipts fell while spending increased, the department said.
Receipts were down $42 billion to $418 billion from a year ago while outlays rose $96 billion to $646 billion.
Big picture: Federal Reserve officials say that the government’s finances are on a long-term unsustainable path, but there is little appetite in Congress to fix it.
Phillip Swagel, the director of the Congressional Budget Office, projects that the deficit will average around $2 trillion per year, adding to the $32.5 trillion national debt.
What are they saying? “We look for a deficit of roughly $1.6 trillion in fiscal 2023 compared to $1.38 trillion in 2022,” said Nancy Vaden Houten, U.S. economist at Oxford Economics. She said the deficit might be adjusted lower when Treasury accounts for the Supreme Court’s decision to strike down the Biden administration’s student-loan forgiveness program, which will reduce spending in 2023 by about $300 billion.
Market reaction: Stocks
DJIA,
SPX,
closed higher on Thursday. The yield on the 10-year Treasury note
TMUBMUSD10Y,
fell to 3.76%.
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