The Treasury released the latest budget data last week, indicating a 12-month rolling deficit of $1.7 trillion, equivalent to our estimated 5.86% of GDP.

The deficit-to-GDP ratio is trending positively, showing a decrease in the deficit relative to GDP. This improvement is largely due to budget revenues growing more than twice as fast as expenditures and a continued wind-down of the COVID-19 deficits. 

Interest payments on the national debt have increased by over 35% year over year, surpassing the U.S. government’s spending on military programs.

It’s not likely anytime soon the Treasury will hit the 3 percent of GDP deficit levels seen at the end of the Obama administration.  Unless, of course, the markets force the issue. 

Note, a typo in the above table: FY ‘22 should read FY ‘23.