As the U.S. fiscal year draws to a close, the budget deficit has exceeded $1.5 trillion

As the current fiscal year is two months away from ending, the U.S. budget deficit has exceeded $1.5 trillion. Although it has slightly decreased compared to the 2023 fiscal year, it is still significantly higher than pre-pandemic levels. Data released by the U.S. Treasury Department shows that in the first 10 months ending in July, the U.S. budget deficit was $1.52 trillion, a 6% decrease from the same period last year; the budget deficit in July was $244 billion, a 16% decrease from July 2023 after adjusting for calendar differences. The increase in revenue has helped narrow the budget deficit. Part of the reason for the increase in tax revenue is that in states affected by natural disasters, the tax deadline was extended from the 2023 fiscal year to this year, with most areas in California being affected. The burden of interest on outstanding U.S. government debt remains a major drag on the budget. Data shows that the total interest cost for the first 10 months of this fiscal year was $956 billion, a 32% increase from the same period in the 2023 fiscal year. The Federal Reserve's aggressive interest rate hikes aimed at curbing inflation have raised the cost of U.S. federal government borrowing. As of the end of July, the weighted average interest rate on interest-bearing U.S. government debt was 3.33%, the highest level since January 2010, an increase of about 0.5 percentage points from the same period in the 2023 fiscal year