Treasury Department: US budget deficit nears $228 billion in June

The US federal budget deficit sharply widened to $227.76 billion in June, up from $88.8 billion in the same month last year. The deficit was $1.39 trillion for the first nine months of the fiscal year, up from $515.1 billion in the same period last year. Government receipts fell from $42 billion to $418 billion, while outlays rose from $96 billion to $646 billion.

The US central bank officials believe the government’s finances are on a long-term unsustainable path, but Congress has little appetite to fix it. The Congressional Budget Office projects that the deficit will increase steadily and continue to add to the federal debt over the next decade. Economists expect a deficit of roughly $1.6 trillion in fiscal 2023 compared to $1.38 trillion in 2022.

The Supreme Court’s decision to strike down the Biden Administration’s student loan forgiveness program could reduce spending in 2023 by about $300 billion. The market’s reaction was mixed, with stocks closing higher and the yield on the 10-year Treasury note falling to 3.76%.