US: Higher budget deficit in February - Wells Fargo

The federal government ran a deficit of $215.2 billion in February, up from a $192 billion deficit in February 2017 with the new withholding tables for individual income taxes were required to be in use by February 15, explained analysts from Wells Fargo. They warned that interest spending keeps rising. 

Key Quotes: 

“The federal government ran a budget deficit of $215 billion in February as tax refund season entered full swing. The impact of the tax law’s changes to individual withholding should begin to be fully felt in the coming months, as employers were required to implement the new withholding tables by February 15.”

“Withheld income tax collections entered February with upward momentum.”

“Federal spending on interest payments has continued to climb in recent months. The increase has largely been the result of faster inflation driving spending on Treasury Inflation-Protected Securities (TIPS). As a share of the economy, interest spending still remains historically low despite a historically high debt-to-GDP ratio. Rising interest rates, however, would continue to pressure this segment of the budget.”