US posted an $88.4bn budget deficit during May - Nomura

According to the monthly budget statement from Treasury, the US posted an $88.4bn budget deficit during May, notes the analysis team at Nomura.

Key Quotes

“Receipts rose 7.0% y-o-y, while outlays increased 18.7%. The total deficit for fiscal year 2017 now stands at $433bn, an increase of 7% compared to this time during FY 2016. May’s budget deficit was in line with the CBO’s estimate of $87bn. Recent months have seen revenues coming in lower than expected by the CBO, causing some market confusion around the exact deadline for when Congress must raise the debt ceiling.”

“These numbers, by coming in at CBO expectations, may marginally reduce the pressure on Treasury to move that deadline forward. Moreover, Treasury has not been releasing many details on when extraordinary measures will run out. However, given that Secretary Mnuchin and other administration officials are not more vigorously advocating for the debt limit to be passed before the August recess, the extraordinary measures may last through September.”