Treasury Budget

The Treasury of the U.S. is the U.S. government’s big fat bank account. Every month, the U.S. Treasury sums up accounting via the Treasury budget (its fiscal year starts in October).

The Treasury budget shows planned spending, and whether spending went as planned. A surplus means they spent less than they had earmarked for a specific purpose. For instance, if they spent less on unemployment insurance this month than they had saved up for unemployment insurance. Deficits mean the opposite: overspending compared to what was earmarked for a specific purpose.

The Treasury budget is necessary for the government to have visibility into its own doings. Any policy changes, new laws, or changes in the tax code will be reflected in the budget. And yeah, it’s publicly available. You can go look it up now, if you want.

It’s no surprise that stock markets are affected by the Treasury budget. There’s a lot in there, but traders are mostly looking at the overall deficit. When the deficit is higher, it means more Treasury bonds are being sold in the market, which makes them worth less. Higher supply of Treasury bonds makes the demand (and the price) for them go down. When the government debt is lower, there are fewer bonds on the market, and they’re consequently worth more.