YTD total $527B vs 459B a year earlier

As the press conference with Tillerson and Lavrov has each side volleying back and forth, the US announced that the budget deficit for March came in at -176.2B vs -169.0B. The YTD deficit is up to -527B from -459B from a comparable period last year. That is at 14.8% increase from last year.

Spending for March was 392.8B vs 335.9B a year earlier

Revenues for March were at 216.6B vs 227.8B a year earlier

Higher spending. Lower revenues is not a good trend.

In the small print, the treasury received $9.7B last month and 41.6B year to date in deposits of earnings by the Federarl Reserve Banks. What is that? That is the coupon payments the Fed has earned on the bonds and MBS that the Fed owns from the QE program. Without it, the deficit would have been -186B. That is a 5.5% cut in the deficit.

When the Fed lowers the balance sheet, that interest income will disappear.

Another thing that could happen, is if rates do go spiking higher, the value of the portfolio goes lower (prices go lower). If the Fed sells debt that was put on at a lower rate, the Fed will book a realize a loss. In other words, they paid 100.00. They sell for 98.45. I don't know the make up of the portfolio (it is 4.4 trillion) and some of the debt may still in the money, the rates are higher now (vs. at the low). It might be the Fed in announcing that they want to start lowering the balance sheet is from the fear that the portfolio may not be as valuable if rates do spike.