U.S. Deficit Shrank Last Fiscal Year, but Is Poised to Widen as Economy Slows
The federal government’s growing need to borrow could drive interest rates higher
The U.S. budget deficit narrowed last year, but a cooling economy and rising interest rates put it on track to widen in the coming years, setting the stage for new financial challenges for President Biden and Congress.
The federal budget shortfall shrank by half to roughly $1.4 trillion in fiscal year 2022, which ended Sept. 30, the Treasury Department said Friday. The budget deficit for the 2023 fiscal year is forecast to hold nearly steady at that level—and above its prepandemic mark—the White House and private sector economists say.