Macro

Key Takeaways

  • The U.S. federal budget deficit totaled $864 billion in June, the largest monthly reading in history.
  • A vast majority of PPP loan recipients surveyed by Goldman Sachs will exhaust their funding by the first week of August while Chapter 11 bankruptcy filings and business closures accelerate.
  • A handful of key programs are set to expire at the end of July, most notably the extra $600 a week in federal unemployment benefits unless Congress approves an extension.
  • With U.S. equity benchmarks at or near all-time highs, another major round of fiscal spending is arguably already priced in, so any disappointment regarding the size of the stimulus package could weigh on risk assets.

 

It’s official: June marked the largest monthly budget deficit in U.S. history ($864 billion) as spending to combat the fallout from COVID-19 breached $1.1 trillion. Last month’s record outlays pushed the deficit to $2.7 trillion for the first half of 2020 on the back of $5 trillion in government spending (or ~25% of U.S. GDP).

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