Treasury Budget


DEFINITION of 'Treasury Budget '

Data released by the U.S. Treasury on a monthly basis that accounts for the surpluses or deficits of the federal government. Treasury budget data tracks the changes in monthly balances as an indicator of budget trends and the direction of fiscal policy.

The annual Treasury budget process starts in January and is usually proposed in April as the President's Budget.

BREAKING DOWN 'Treasury Budget '

As the deficit increases, more Treasury notes and bonds are sold to finance the government's operations. If demand remains constant and supply increases, the value of the instruments goes down. Alternatively, the opposite occurs when the deficit increases (or there is a surplus). If demand remains constant and supply diminishes, the price of these government debt securities should increase.

Lower prices in bonds and notes equates to higher yields for the investor. Higher yields in the market means the government must issue Treasury securities at higher interest rates. When these risk-free rates are increased, the effect is seen across all debt markets, and a high interest rate environment is born. This is bearish for the equity markets.

  1. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced ...
  2. Deficit

    The amount by which a resource falls short of a mark, most often ...
  3. Surplus

    The amount of an asset or resource that exceeds the portion that ...
  4. Yield

    The income return on an investment. This refers to the interest ...
  5. U.S. Treasury

    Created in 1798, the United States Department of the Treasury ...
  6. Economic Cycle

    The natural fluctuation of the economy between periods of expansion ...
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