Tax collections fell in June as the Trump Tax Cut continued to bite into federal revenues. The fall in tax collections, combined with the rise in spending stemming from the Congressional Budget Busting Agreement signed by Trump, is causing an increase in the government’s issuance of Treasury bills, notes, and bonds, month in and month out.
That increase in supply puts downward pressure on bond prices and increases in interest rates and bond yields. It isn’t obvious in the bond market at the moment, since the 10 year yield has traded in a tight range around the 2.80s. But short term T-bill rates are soaring, with the 13 week bill hitting 2% this week.
Meanwhile increased debt-financed deficits have kept the US economy running hot, but there are hints of slowing in current data. That’s not supposed to happen. Tax cuts and deficit spending are supposed to stimulate spending.
The post The Trump Tax Cut’s in Full Swing. But These Debts Don’t Look Good. appeared first on Lee Adler’s Sure Money.