Budget Deficit Surges As Interest On US Debt Hits All Time High

February is traditionally not a good month for the US government income statement: that’s when it usually runs a steep monthly deficit as tax returns drain the Treasury’s coffers. However, this February was worse than usual, because as spending rose and tax receipts slumped, the US deficit jumped to $215 billion, the biggest February deficit since 2012.

https://www.zerohedge.com/sites/default/files/inline-images/US%20deficit%20february.jpg?itok=ooSwHJ2S

According to the CBO, receipts declined by 9.4% from last year as tax refunds rose and the new withholding tables went into effect. On a rolling 12 month basis, government receipts rose only 2.1%, a clear slowdown after rising 3.1% in December after contracting as recently as March 2017. At this rate of decline, the US will post a decline in Federal Receipts by mid-2018.

https://www.zerohedge.com/sites/default/files/inline-images/federal%20receipts%20yoy.jpg?itok=f43sRIib

Outlays meanwhile rose by 2% due to higher Social Security and Medicare benefits rose and additional funds were released for disaster relief.

Putting these two in context, in Fiscal 2000, Treasury receipts in the Oct-Feb period were $741.8 bn, nearly matching outlays of $741.6 bn. In Fiscal 2018 meanwhile, receipts in the Oct-Feb period are $1.286 tn while outlays are $1.677 tn. Receipts are growing an average 4% per year, while outlays are rising an average 7%.

https://www.zerohedge.com/sites/default/files/inline-images/tsy%20receipts%20months.jpg?itok=yIZ8tAG3

Here is a snapshot of February and Fiscal YTD receipts and outlays.

https://www.zerohedge.com/sites/default/files/inline-images/monthly%20budget%20march%202018.jpg?itok=VHiRArSG

But most troubling was the jump in interest on the public debt, which in the month of February jumped to $28.434 billion, up 10.6% from last February and the most for any February on record. In the first five months of this fiscal year, that interest is $203.234 bn, up 8.0% y/y and the most on record for any Oct-Feb period. The sharp increase comes as the US public debt rapidly approaches $21 trillion. And with the effective interest rate now rising with every passing month, it is virtually assured that this number will keep rising for the months ahead.

https://www.zerohedge.com/sites/default/files/inline-images/feb%20debt%20interest.jpg?itok=mB5LmJvl

Source: ZeroHedge

* * *

Dollar Dumps, Treasury Yields Erase Post-Payrolls Spike

https://www.zerohedge.com/sites/default/files/styles/inline_image_desktop/public/inline-images/2018-03-12_11-32-27.png?itok=jF791WCK

Fed Admits ‘Yield Curve Collapse Matters’

https://www.zerohedge.com/sites/default/files/inline-images/2018-03-12_9-31-33.png?itok=69-Q3Eqm

 

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