economy
U.S. budget deficit surged in July to highest level since March 2021
Beyond the big single-month jump, the collective red ink over the 10 months of the fiscal year rose to nearly $1.8 trillion, surpassing the same period in 2025.
TL;DR
- The U.S. budget deficit reached its highest monthly level in over five years in July.
- Medicare costs were a major contributor, totaling $174 billion in July and $955 billion for the full year to date.
- The cumulative deficit for the first 10 months of the fiscal year is nearly $1.8 trillion, surpassing the same period in 2025.
- Interest on the national debt also continues to be a significant expenditure, with $1.17 trillion paid year-to-date.
- Tariff refunds and accelerated benefit outlays also impacted the budget in July.
- Market expectations regarding Federal Reserve interest rate changes are shifting due to recent inflation and payroll data.