Deficit Hawks Are Officially Extinct
Republicans push tax cuts that widen deficits. Democrats push unfunded programs. Only the Fed is worried.
The former president is warning Democrats about the price tag of their big ideas.
Photographer: Justin Sullivan/Getty Images
There is no party of fiscal responsibility in the U.S. But there is the Fed. Will it matter?
Financial market turbulence in the fourth quarter of last year tightened financial conditions and led the Federal Reserve to rethink plans to increase interest rates multiple times in 2019. Strengthening that posture have been forecasts for relatively poor economic growth in the first quarter of 2019, with estimates currently around 1 percent for real gross domestic product growth. Add in inflation data that continues to come in around 2 percent rather than significantly above the Fed’s target, and an unemployment rate a touch higher than the Fed anticipated a few months ago.