The monthly shortfall pushes the fiscal year-to-date deficit to $1.8 trillion with two months remaining.
The US Treasury reported a $432.3 billion budget deficit for July, the largest monthly gap since March 2021. The figure reflects elevated government spending and lower-than-expected revenue collections for the month.
The year-to-date deficit now stands at $1.8 trillion, compared with $1.6 trillion during the same period last fiscal year. Analysts had anticipated a narrower monthly deficit, citing seasonal tax receipts.
Bond yields edged higher following the release, as investors weighed the implications for future Treasury issuance.