Swings in the bond market recently sent the yield on the 10-year Treasury above 4.80% and its highest level since 2023. The bond market's moves might seem strange given that the Federal Reserve has lowered interest rates three times starting in September. The Fed has cut its main interest rate by a full percentage point since September.

For the final calendar month of 2024, the shortfall totaled $86.7 billion, which actually represented a 33% decline from a year prior.

The $711 billion October-December deficit was $201 billion higher than the $510 billion deficit in the same period a year earlier.

The U.S. government posted an $87 billion budget deficit in December, reduced partly by a shift of benefit payments into November but capping a record $711 billion deficit for the first three months of the 2025 fiscal year,

The U.S. federal budget deficit widened to a record $711 billion in the first three months of the fiscal year, up from $510 billion in the same period last year, an increase of 39%, the Treasury Department said Wednesday.

The U.S. federal government spent $87.0B more than it earned in December, compared with the -$80.0B shortfall expected and November's -$367.0B deficit, according to the Treasury Department's statement released on Tuesday.