The U.S. government recorded a $161 billion budget deficit in March—a 32% drop from last year—largely due to a calendar shift in benefit payments, the Treasury Department reported.
Revenues rose, and customs duties hit $8.75 billion, boosted by President Trump’s recent tariff hikes.
For fiscal year 2025’s first half, the deficit reached $1.307 trillion, the second-largest six-month shortfall ever. Officials expect tariff revenue and trade deals to reduce the deficit going forward.
Inflation also eased in March, with consumer prices falling 0.1%—the first monthly drop since May 2020. The annual inflation rate declined to 2.4%. Energy prices dropped sharply, while food and shelter rose modestly.
Trump delayed some planned tariffs and urged the Fed to cut interest rates. Analysts say the Fed faces tough decisions as tariffs could drive inflation up again.
