"Tax Revenue Surge Sparks Hope for Reprieve in 10-Year Treasury Yield"

The 10-year Treasury yield surged to 4.99% on Oct. 19, driven by factors such as increased borrowing needs by the Treasury Department, a sovereign downgrade by Fitch Ratings, a more hawkish Federal Reserve, and strong GDP growth. However, tax revenue for October shows a significant increase compared to the same period last year, with corporate taxes alone reaching $50.6 billion. The surge in tax revenue may help alleviate the fiscal 2023 budget deficit, which would have been around $2 trillion if not for the Supreme Court striking down student loan forgiveness. The Treasury's heavy borrowing needs are partly due to the Fed unloading up to $60 billion in Treasuries per month and the need to restore its cash balance after spending it down to avoid breaching the debt limit. Despite the increased borrowing, the Treasury aims to end Q4 with a cash balance of $750 billion.