Tax Take Spikes, Funding Pressures Limited, Bill Issuance Impact Eyed

The April 15 tax deadline brought in substantial revenues to the U.S. Treasury, including $63.5B in corporate income taxes and $86.6B in individual electronically-filed taxes. When added to $4.7B in non-electronically filed individual taxes, the tax day haul totalled $155B, up from $105B in 2023 and $114B in 2022.

• This brought the past 6 days' total to $270B, narrowing the gap with the equivalent period of 2022 ($283B) and exceeding 2023 ($242B) - see chart below.
• Even so, once again, there was little evidence of funding market pressure for the session, as observed in SOFR (only ticking higher 1bp on Monday before retracing that move Tuesday) and other rates, as well as Federal funds market volumes.
• Tuesday's data will be released at 1600ET/2100UK Wednesday - while the total receipts will undoubtedly retreat from Monday, they are likely to reflect stronger non-electronic individual submissions sent over the weekend.
• If tax collection continues to run at a healthy pace, it could reduce Treasury's financing requirement via bills.
• The overall net increase in Treasury's cash holdings on April 15 was $172B, bringing the Treasury General Account to $897B - the highest level since May 2022.
• Wrightson ICAP writes that "the risks in the daily tax receipt data are clearly skewed to the high side of our forecast [Monday's increase in the TGA was $21B more than they anticipated], but the surprises in the coming days may not be quite as large as those we have seen thus far. We have not made any further reductions in our bill offering forecasts in light of the positive cash balance surprises so far this week. We will almost certainly adjust our bill forecasts to assume additional gross offering size reductions in May, but we will wait for at least another day or two of tax data before overhauling our auction projections yet again."

Source: MNI based on Daily Treasury Statement