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CNBC Piece: The deficit is down big
Posted on 1/14/26 at 1:51 pm
Posted on 1/14/26 at 1:51 pm
quote:
The explosion of the budget deficit was one of the most worrisome things that happened post-Covid. While inflation peaked in 2022, the deficit kept getting worse because of the "fiscal doom loop" caused by bloated spending and higher interest rates.
At this time last year things were still looking extremely grim. The deficit was stuck around $2.1 trillion on a rolling 12-month basis, or 7.3% of GDP--the largest non-emergency deficit we've ever had. And the10-year Treasury yield was stuck above 4.7%, worsening the situation daily. Now, though, we are experiencing a dramatic improvement.
The latest numbers which we got yesterday afternoon illustrate the sharp change we've seen. For the first three months of the fiscal year (October through December), the deficit is down $109 billion, or 15% from a year earlier. Tariff revenues, known as "customs receipts," are a big part of that, hitting $90 billion from $20 billion the prior year.
The market had been anticipating some improvement, as we wrote last summer. The 10-year Treasury yield even dipped below 4% briefly in the fall. The question now is how long this improvement can last. Tariff revenues already appear to be plateauing at around $30 billion a month. And the "One Big Beautiful Bill" is expected to increase the deficit in the months ahead.
"Spending is not budging," writes Dan Clifton of Strategas, a Baird company. It's still around 23% of GDP, versus 20% historically, he notes. It's because income tax receipts (along with tariffs) have been stronger than expected this year that the deficit has been improving. "Without spending coming down, it's hard to get the deficit from 6% to 3% of GDP," he says.
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3
Posted on 1/14/26 at 2:18 pm to ragincajun03
But there are so many more important things to keep the eyes on.. the fake riots.. fake outrage shooting in MN and Epstein
Posted on 1/14/26 at 2:21 pm to slidingstop
"Turns out, all we needed was a new President."
-President Donald John Trump
-President Donald John Trump
Posted on 1/14/26 at 2:24 pm to ragincajun03
quote:
Tariff revenues already appear to be plateauing at around $30 billion a month.
With USMC about to expire. Canadians will get slammed with tariffs because of “elbows up!”
Not plateauing.
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