Guillermo
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Treasury may cut debt sales by half, boosting bond - 2006/10/30 15:07
The U.S. Treasury may slash its proposed debt sales this quarter by almost 50 percent because of an unanticipated surge in tax revenue.
A decrease might provide a lift to government bonds, which rallied last week on a report of weaker home sales and comments by the Federal Reserve suggesting inflation will slow. The Treasury will announce its plans today. Wrightson ICAP, a Jersey City, New Jersey-based research firm, predicts a drop to as little as $55 billion from a projected $104 billion in August.
A 27% jump in corporate tax revenue shrank the U.S. budget deficit for the year ended Sept. 30 to $248 billion, the smallest in four years. Lehman Brothers Inc. and Morgan Stanley a year ago predicted the fiscal 2006 shortfall would total more than $400 billion because of spending on the war in Iraq and to rebuild after Hurricane Katrina.
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