July’s $432.3 billion shortfall pushes the US fiscal 2025 year-to-date deficit to $1.799 trillion amid tax cut discussions.
The US Treasury reported a $432.3 billion budget deficit for July, the largest since March 2021, as receipts of $334 billion fell short of $766 billion in outlays. The gap widened as the White House considers additional tax cuts ahead of midterm elections.
Year-to-date, the federal deficit reached $1.799 trillion through seven months, reflecting higher spending and lower-than-expected revenue. Some July outlays were accelerated due to August 1, 2026, falling on a non-business day, including military pay, veterans benefits, and Medicare payments.
Long-term Treasury yields at 5.2%-5.3% may pressure bond and real estate ETFs like TLT and VNQ as deficit concerns grow. The fiscal strain coincides with discussions of new tax breaks, adding uncertainty to policy outlook.