Weak Tax Receipt Figure Could Spur Earlier X-Date Expectations (2/2)

The main focus in the Treasury data today and tomorrow is whether enough tax has been collected to build up the TGA sufficiently to avoid reaching the "x-date" before the next big tax collection round in mid-June.

• Currently, the x-date is broadly anticipated to arrive in late July to early September, but those estimates will be impacted by this week's data.
• Estimating the Treasury's cash flows is an inexact science, and it's even hard to gauge what consensus is for tax collection this week as different analysts use different metrics for their stated estimates (individual vs total receipts, deposits vs TGA levels, full April collection vs Apr 17+18).
• But roughly speaking, $200B is the level to watch for total collection today and tomorrow, with a range $150-250B fairly neutral.
• Above $200B and certainly $250B+ will be considered sufficient to get through most of July if not August, and well above that would be considered fairly comfortable.
• If under $200B is collected today and tomorrow, in particular if it's toward $150B or less, that will put more market focus on an X-Date in early June.
• There's a range of opinions on that within that spectrum and we would probably only really get a sense by mid-May whether a June x-date is looming.
• As we pointed out in last week's Fed Balance Sheet Tracker, the “official” outlook has been for the x-date to be hit in early June, but that is fairly dated guidance – we may hear more in early May after the tax receipts are collated, perhaps as part of the Treasury’s quarterly refunding announcement on May 3.