Monday, October 15, 2018

US Budget Deficit Explodes

And you wonder why interest rates are climbing?

The U.S. federal budget deficit rose in fiscal 2018 to the highest level in six years as spending climbed, according to a statement from Treasury Secretary Steven Mnuchin and Office of Management and Budget Director Mick Mulvaney. 

The deficit jumped to $779 billion, $113 billion or 17 percent higher than the previous fiscal period.

 It was larger than any year since 2012, when it came in at $1 trillion. 

A spike in defense spending, as well as increases for Medicaid, Social Security and disaster relief, contributed to the increase.

The budget deficit is expected to climb over $1 trillion again by fiscal 2020.

Keep in mind that government, unlike the private sector, is willing to borrow at any interest rate fully expecting that the Fed will monetize some, or all, of the debt.

I expect interest rates to continue to expand upward.


1 comment:

  1. Sure glad them Republicans are in there reducing spending!