X-Date Could Hit As Soon As June: Latest Tax Data Puts Worst-Case Scenario In Play

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by Tyler Durden
Saturday, Apr 22, 2023 - 10:00 PM

With Wall Street's attention suddenly transfixed on the upcoming debt ceiling fiasco following our report  "Why This Week's Tax Data Could Lead To A Much Earlier Debt Ceiling Crisis" (as well as subsequent articles here and here) in which we warned that sharply weaker tax receipts (a non-trivial puzzle considering the BLS claims the US generated 4 million jobs since last year yet tax receipts are 30% lower) in 2023 could bring forward the infamous X-date from the previous consensus of as far as October to as soon as June, on Friday we said that the latest Daily Treasury Statement (or DTS) which updates the Treasury's daily cash balances, receipts and outlays, would be a doozy and far more important and informative than the Fed's Friday H.8 statement (which tracks bank deposit and loan data).

Sure enough, just after the market close on Friday, the latest DTS (as of April 20) dropped and it was even worse than we expected: according to the Treasury, the cash balance of the Treasury General Account rose by just $14.8bn amid sharply lower than expected tax receipts.