Wall Street Is Looking Ahead to September Liquidity Pinchpoints
Since Congress lifted the debt ceiling last month, Treasury has issued about $328 billion of short-dated government securities in order to rebuild its cash balance. That draws money out of the financial system, leaving it vulnerable to unexpected events. For now, bank reserves still remain abundant at around $3.33 trillion, providing a necessary cushion for funding markets, according to the latest Federal Reserve data.
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San Francisco Chronicle
a few seconds ago
- San Francisco Chronicle
US budget deficit up 20% year-over-year despite record Trump tariff income
WASHINGTON (AP) — Despite the U.S. taking in record income from President Donald Trump's tariffs in July — with a 273% increase in customs revenues (or $21 billion) from this time last year — the U.S. budget deficit is still higher, according to Treasury Department data released Tuesday. The government's shortfall has climbed 20% this fiscal year compared to the same period in 2024. Even as Trump talks about America becoming rich because of his import tax hikes, federal spending keeps outpacing the revenues collected by the government. That financial picture might change as companies exhaust their pre-tariff inventories, forcing them to import more goods and generate even more in tax revenues that could whittle away at the deficit without meaningfully reducing it as promised. If tariffs fail to deliver on Trump's pledge to improve the government's balance sheet, the American public could be faced with fewer job options, more inflationary pressures and higher interest rates on mortgages, auto loans and credit cards. The budget deficit is the annual gap between what the U.S. government raises in taxes and what it spends, over time feeding into the overall national debt. A Treasury official who spoke on the condition of anonymity to preview the data said overall increased spending is in part due to a mix of expenditures, including growing interest payments on the public debt and cost-of-living increases to Social Security payouts, among other costs. This comes as the federal government's gross national debt creeps up to the $37 trillion mark. While organizations like the Committee for a Responsible Federal Budget say that tariff income can be a stream of meaningful revenue — estimated to generate about $1.3 trillion over the course of President Trump's four-year term in office; some economists like Kent Smetters of the University of Pennsylvania's Penn Wharton Budget Model say tariffs are likely to result ' in only modest reductions in federal debt.' In June, the Congressional Budget Office estimated that President Donald Trump's sweeping tariff plan would cut deficits by $2.8 trillion over a 10-year period while shrinking the economy, raising the inflation rate and reducing the purchasing power of households overall. But revenue estimates are also difficult to predict as the president has changed his tariff rates repeatedly and the taxes declared as part of an economic emergency are currently under appeal in a U.S. court. Treasury Secretary Scott Bessent said last month on Fox Business Network's 'Mornings with Maria' that the administration is 'laser-focused on bringing this deficit down.' The Trump administration expects to make more trade deals with other nations, including China and other major economies. For instance, on Monday, Trump extended a trade truce with China for another 90 days, which preserves the 30% tariffs he had imposed as a condition for negotiations. The previous deadline was set to expire at 12:01 a.m. Tuesday. Trump posted on his Truth Social platform that he signed the executive order for the extension, and that 'all other elements of the Agreement will remain the same.' Beijing, at the same time, also announced the extension of the tariff pause, according to the Ministry of Commerce.
Boston Globe
a few seconds ago
- Boston Globe
US July budget deficit up 20% year-over-year despite record Trump tariff income
If tariffs fail to deliver on Trump's pledge to improve the government's balance sheet, the American public could be faced with fewer job options, more inflationary pressures and higher interest rates on mortgages, auto loans and credit cards. The budget deficit is the annual gap between what the US government raises in taxes and what it spends, over time feeding into the overall national debt. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up A Treasury official who spoke on the condition of anonymity to preview the data said overall increased spending is in part due to a mix of expenditures, including growing interest payments on the public debt and cost-of-living increases to Social Security payouts, among other costs. This comes as the federal government's gross national debt creeps up to the $37 trillion mark. Advertisement While organizations like the Committee for a Responsible Federal Budget say that tariff income can be a stream of meaningful revenue — estimated to generate about $1.3 trillion over the course of President Trump's four-year term in office; some economists like Kent Smetters of the University of Pennsylvania's Penn Wharton Budget Model say tariffs are likely to result " in only modest reductions in federal debt." Advertisement In June, the Congressional Budget Office estimated that President Trump's sweeping tariff plan would cut deficits by $2.8 trillion over a 10-year period while shrinking the economy, raising the inflation rate and reducing the purchasing power of households overall. But revenue estimates are also difficult to predict as the president has changed his tariff rates repeatedly and the taxes declared as part of an economic emergency are currently under appeal in a US court. A Treasury official did not respond to an Associated Press request for comment on when the US could begin to see tariff revenue start to put a dent in the deficit. Treasury Secretary Scott Bessent said last month on Fox Business Network's 'Mornings with Maria' that the administration is 'laser-focused on bringing this deficit down.' The Trump administration expects to make more trade deals with other nations, including China and other major economies. For instance, on Monday, Trump extended a trade truce with China for another 90 days, which preserves the 30 percent tariffs he had imposed as a condition for negotiations. The previous deadline was set to expire at 12:01 a.m. Tuesday. Trump posted on his Truth Social platform that he signed the executive order for the extension, and that 'all other elements of the Agreement will remain the same.' Beijing, at the same time, also announced the extension of the tariff pause, according to the Ministry of Commerce. Advertisement ___ Associated Press writer Josh Boak contributed to this report.
UPI
a minute ago
- UPI
Trump's Fed nominee Stephen Miran critical of China monetary policies
1 of 2 | Stephen Miran, President Trump's nominee for the Federal Reserve Board, walks outside the White House on Tuesday. Photo by Francis Chung/UPI | License Photo Aug. 12 (UPI) -- Stephen Miran is President Donald Trump's nominee to become the Federal Reserve's next governor, but his name is largely unknown to the American public. Miran, 41, visited the White House on Tuesday for reasons unknown, but his candidacy to temporarily fill a vacancy on the Federal Reserve Board of Governors likely will make Miran's name more familiar with those who pay attention to the Federal Reserve's lending rate. Miran is a Harvard-educated tariffs advocate with a doctorate in economics who views China as rigging the global monetary system to ensure it has a competitive edge over the United States, according to a recent Fortune profile of Miran. Miran told Fortune that, while working as a currency-focused economist on Wall Street in his late 20s, he noticed China's monetary policies devalued its renminbi currency while boosting the value of the U.S. dollar. "The currency markets are a bit of the wild wild West," he told Fortune. "All sorts of things happen that shouldn't happen in an economics textbook." Miran said nations such as China heavily manage their respective currencies, which makes global markets "behave in weird ways." China's monetary policies cause the U.S. dollar to be overvalued while undervaluing its renminbi, he explained. The result, he said, is a U.S. trade deficit with China due to increased exports from China to the United States while greatly reducing the flow of U.S.-made goods to China. China ranks as the world's second-largest economy, while the United States remains the world's economic leader. China has erected market barriers for U.S.-made goods by imposing tariff rates that are higher than the U.S. tariffs on Chinese-made goods, stealing Internet technologies and utilizing other "non-market barriers," Miran said. "Watching the accumulation of Chinese currency reserves in dollars accruing from exports was absolutely eye-opening," he told Fortune. China's monetary and trade policies robbed the United States of jobs while punishing it for being the world's largest economy, Miran said. Miran chairs the Council of Economic Advisers and likely will become the Federal Reserve's next governor for a temporary term through January. "He has been with me from the beginning of my second term," Trump said when announcing Miran's nomination. "His expertise in the world of economics is unparalleled," Trump added. "He will do an outstanding job." If confirmed by the Senate, Miran will replace former Federal Reserve Gov. Adriana Kugler, who was nominated by President Joe Biden in 2023 and was to serve until January. Kugler resigned her position as one of seven Fed governors without saying why and ended her governorship on Friday. Trump suggested Kugler resigned because she dissented from the Federal Reserve's recent announcement that it would maintain its current lending rate of between 4.25% and 4.5% instead of lowering it. Miran would serve the remainder of the term for Kugler's vacant seat and would be eligible for a subsequent 14-year term, which is the standard term for a member of the Federal Reserve's Board of Governors. The Senate is in recess but will reconvene in early September and would vote on Miran's nomination prior to the Federal Reserve's Open Market Committee meeting that is scheduled Sept. 16-17. Trump said he likely will nominate someone else to permanently replace Kugler. The president also will seek a replacement for Federal Reserve Chairman Jerome Powell, whose term ends in May. Trump has contemplated firing Powell due to the Federal Reserve not reducing its current lending rate since shortly before the Nov. 5 general election. Federal officers, National Guard patrol Washington President Donald Trump announced he is placing the D.C. Metropolitan Police Department under federal control and deploy the National Guard to the district to assist in crime prevention. Photo by Bonnie Cash/UPI | License Photo
