Federal Government Balance Sheet (MTS)

[Boghie]

Reviewing the Monthly Treasury Statement (truncated at billions because millions are chump change):

	Revenue	Expenses	Deficit
FY2025 (2024/10 -> 2024/11)	627	1272	623
FY2026 (2025/10 -> 2025/11)	740	1198	457

Personally, I think this is more a driver for interest rates than some FED wiggle. The Federal Government is squeezing the bond/debt market with their heavy usage of credit. That will increase interest rates. We want to see Revenue go up, Expenses go down, and most importantly the borrowing (deficit) shrink. If we see interest rates hold steady or increase even when the FED decreases the base rate than things are bad. Very bad...

Another thing...
If 'Revenue' is increasing that is a trailing indicator of economic growth. You don't pay tax on loss. It could be passive gain, but that will be a minor tick. I may use this thread to document deep dive thoughts from the statement.

Finally, another last thing...
It's not really safe to take one month snapshots of the Monthly Treasury Statement. I know that sounds odd, but sometimes an expense will be paid out at the end of a month when it is normally disbursed at the beginning of the month, so... To see patterns look for anomalies. Group like(ish) months. Look at last year's revenue and spending patterns.

 

[Boghie]

	Revenue	Expenses	Deficit
FY2025 (2024/10 -> 2024/11)	627	1272	623
FY2026 (2025/10 -> 2025/11)	740	1198	457
Differential	+ 113 Billion	- 74 Billion	- 166 Billion

I hope I can change the initial post with current data.

What this is showing - from 30k feet - is that folks are paying taxes. That is, individuals and businesses are earning more income this year than last year. That is a good thing. It will be reflected in C/S.

Another thing this is showing is that we are spending $37 Billion less per month. Kinda chump change, but...

 

[WorkFE]

we are spending $37 Billion less per month. Kinda chump change, but...

I will go out to dinner a few more times a month.

 

[Boghie]

I will go out to dinner a few more times a month.

Mathed out and we are talking about something around $400 Billion per year, so there is that...

I think it is the DOGE cuts for the most part, so the spending decrease is structural...

Personally, whatever the FED does is meh. This deficit is the elephant in the room. 'Orange Man Bad' is not really a tight wad deficit hawk, but I don't think he wants to be the dude with the label 'I was the first President to default on the debt'. I expect more cuts and more attempts to find revenue streams.

One interesting thing is that income growth indicates monetary growth and, thus, inflation is a potential concern. The FED is likely reducing interest rates when they should be looking at increasing them... These are normal range FED rates, not high ones.