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Treasury Warns $1.45 T Shortfall, Fed to Shrink Balance Sheet

8/8/2026

Summary

Story summary

The United States Treasury Borrowing Advisory Committee warned that auction sizes create a $1.45 trillion shortfall for fiscal 2027–28.
Treasury Secretary Scott Bessent relies on short-term bills to fund a $2 trillion annual deficit.
Interest costs added $120 billion to Treasury outlays this year, raising annual debt-service interest above $1 trillion.
Fed Chair Kevin Warsh plans to shrink the Fed’s balance sheet by moving holdings to securities, with a report due in December.

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Story summary

The United States Treasury Borrowing Advisory Committee warned that auction sizes create a $1.45 trillion shortfall for fiscal 2027–28.
Treasury Secretary Scott Bessent relies on short-term bills to fund a $2 trillion annual deficit.
Interest costs added $120 billion to Treasury outlays this year, raising annual debt-service interest above $1 trillion.
Fed Chair Kevin Warsh plans to shrink the Fed’s balance sheet by moving holdings to securities, with a report due in December.