(Bloomberg) -- Interest payments on outstanding US debt continued to drive the federal government’s budget deficit, which reached $1.27 trillion for the fiscal year through June.
The deficit in June was $66 billion, despite receipts hitting a record for that month at $466 billion, according to data released Thursday by the Treasury. Adjusted for calendar differences, the month’s shortfall was $5 billion smaller than in June 2023. The year-to-date deficit also fell slightly short of the same period last year.
Interest on public debt in June hit $140 billion and totaled $868 billion in the first nine months of the current fiscal year — 33% higher than in the same period last year.
The Federal Reserve’s aggressive interest-rate hiking campaign — aimed at quelling high inflation — has made debt more expensive. The weighted average interest rate on US total marketable government debt was 3.3% at the end of June — the most expensive since 2008 and roughly 60 basis points higher than a year before.
Tax receipts remained strong compared to last year, both on a monthly and year-to-date basis. But Treasury officials said much of the year-over-year gains could be attributed to a deferral of tax deadlines from fiscal 2023 into this year in states that suffered from natural disasters. Affected areas included most of California.
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