The U.S. Department of the Treasury has released the latest “Monthly Treasury Statement” for July 2026. According to the data, the federal government’s budget deficit in July soared to $432 billion, marking the highest record for the month of July. Additionally, the cumulative deficit for the first 10 months of the 2026 fiscal year (from October 2025 to July 2026) has reached $1.8 trillion.
In the report, it is indicated that total federal government spending in July amounted to $766 billion, while only $334 billion was collected in revenue. However, the Treasury Department explained in its official statement that the size of the deficit for the month was influenced by two specific short-term accounting factors.
The department stated that due to August 1, 2026, falling on a weekend, approximately $99 billion in federal benefit payments had to be disbursed by the end of July. These early recognized expenses primarily cover statutory allocations such as Medicare, veterans’ benefits, and military retirement payments.
Furthermore, the Treasury Department noted that due to a recent Supreme Court ruling, the federal government executed around $33.3 billion in tariff refunds in July, resulting in a rare net outflow in customs duties for the month and further lowering the total fiscal revenue.
The report estimates that excluding the $99 billion calendar effect mentioned earlier, the adjusted actual deficit for July is approximately $333 billion. Treasury Department data also indicates that even after adjusting for the deficit figure, there is still about an 18% increase compared to the same period last year.
Regarding the continuing expansion of the actual deficit size, the Congressional Budget Office (CBO) pointed out in its recent budget review report that federal finances are facing two major structural pressures.
The CBO’s analysis shows that on one hand, mandatory benefit spending driven by an aging population (such as social security and Medicare) is steadily increasing. On the other hand, in the current interest rate environment, rising interest costs on the national debt have become a key driver of overall federal expenditures, a trend confirmed by the detailed data from the Treasury Department for July.