Unexpected Last Minute Jump In Tax Receipts Gives US 1-Month Delay Until Debt Ceiling Crisis

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by Tyler Durden
Thursday, Apr 27, 2023 - 10:11 AM

Over the weekend, when looking at the tax data collected several days after the April 18 Tax deadline, when there is traditionally a surge in tax receipts by the US Treasury, we observed that YTD tax receipts were running a whopping 35% below their level from last year, and quoted Goldman's chief economist who concluded that "at this rate, an early June deadline looks nearly as likely as the late July deadline we project."

But maybe not so fast. With tax collections season having been largely left for dead, and sparking a furious surge in US Credit Default Swaps now that many traders expected that there is just one month for Congress to get a debt ceiling deal in place, there was some unexpected good news: on April 25, the Treasury took in a surprisingly large amount of tax receipts, which according to Goldman reduced the probability of an early June deadline. As shown in the chart below, the Treasury General Account (TGA or Treasury cash parked at the Fed) on April 24 jumped by $26BN, and another $9BN the next day.