The Congressional Budget Office is running out of Treasury information as debt-reduction negotiations continue.
- The US faces a high risk of default in the first two weeks of June without increasing the debt limit
- The ability to fund government operations will remain uncertain throughout the month of May due to mixed revenue collection and expenditure
- The Treasury will not be able to make some payments before its cash balance and extraordinary borrowing procedures are completely exhausted
- The hoard is likely to fund the government until at least the end of July if the cash and extraordinary measures available until June 15th continue without error.
- The end-of-July scenario is based on the Treasury collecting sufficient quarterly discretionary tax payments on June 15, and reaching $145 billion in new extraordinary measures available on June 30.
- As of April 30, the Treasury had $316 billion in cash and $41 billion in borrowing capacity available under extraordinary measures.
- The Treasury announced cash balances of $154.8 billion on Wednesday
- Mid-May outlays are likely to exceed 50 billion due to interest payments on 10-year bonds and bonds
- It would likely pay about $25 billion in Army salaries, Social Security, and other benefits
- Financing may need $200 billion to $300 billion, June in $75 billion to $100 billion
- The US government will likely need between $1.9 and $2.2 trillion in resources to fund operations through the end of the fiscal year on September 30.
- The 10-year deficit forecast increased by $51 billion to $20.26 trillion
- The US government’s payments could lead to distress in the credit market, rapid increases in borrowing costs and economic turmoil
The numbers are not encouraging.
In the meantime, staff are meeting to work closer to an agreement but key parties are not expected to meet until Monday/Tuesday next week.
Markets spooked first by Michigan’s inflation and now by the clamor of the CBO.
- The Nasdaq is now down -0.43%.
- The two-year yield is now up 6.5 basis points
- The US dollar continues to rise. The DXY is now up 0.48% at 102.55 as a flight to the relative safety of the dollar appears to be the reaction.
Looking at DXY, the price moved above the swing high from May 2 at 102.40 and broke out of a mostly up and down trading range between 101 and 102.40.
Looking at the hourly chart, the 38.2% retracement of the downward move from the March 8 high comes in at 102,742. The swing high comes from Apr 10 at 102.807 near the retracement level. This area is the next target
DXY is breaking up and out of the upswing and downswings
/economic inflation
economic inflation
Inflation is defined as a quantitative measure of the rate at which the average price level of goods and services in an economy or a country increases over a period of time. It is the rise in the general price level where you actually buy a particular currency less than it was in previous periods. In terms of evaluating strength or currencies, and therefore foreign currencies, inflation or its measures are very influential. Inflation stems from the general creation of money. This money m
Inflation is defined as a quantitative measure of the rate at which the average price level of goods and services in an economy or a country increases over a period of time. It is the rise in the general price level where you actually buy a particular currency less than it was in previous periods. In terms of evaluating strength or currencies, and therefore foreign currencies, inflation or its measures are very influential. Inflation stems from the general creation of money. This money m
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