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US posts largest July deficit since 2021 amid talks of new tax cuts before midterms

Market News
13 Aug 2026
24/7 Wall Street
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Bearish
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The US Treasury reported a $432.3 billion deficit in July, the largest single-month shortfall since March 2021, driven by accelerated payments and rising interest costs. Year-to-date, the federal deficit stands at $1.799 trillion. The administration is considering new tax cuts, including inflation-indexed capital gains and expanded home sale exclusions, which could increase fiscal pressure. Investors are watching bond yields and Treasury statements closely, as rising deficits and potential tax cuts may impact long-term interest rates and market stability.

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