Nine months into the fiscal year, the federal deficit has topped $1 trillion for the first time. The imbalance is intensifying fears about higher interest rates and inflation; there's also concern about trying to reverse the deficit—by reducing government spending or raising taxes—in the midst of a harsh recession. The Treasury Department said today that the deficit in June totaled $94.3 billion, pushing the total since the budget year started in October to nearly $1.1 trillion. (More budget deficit stories.)