Economics
Specter of America's Growing Fiscal Deficit and Debt Load Looms
- Bond yields still relatively low thanks to safe haven demand
- Fed roll-off of Treasury holdings adds to public debt burden
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America’s worsening fiscal outlook and mounting government debt are hiding in plain sight, but that troubling mix may not get a pass from investors for much longer.
President Donald Trump’s tax cuts and new federal spending have fueled a budget deficit that the Congressional Budget Office predicts will reach $1 trillion in 2020. With the Federal Reserve also winding down its debt holdings, that’s forced Treasury Secretary Steven Mnuchin to lift note and bond sales to levels last seen in the aftermath of the recession that ended in 2009.