Fiscal Policy

In Government We Trust

Feb 10, 2023 2 min read

Over the past 12 months through January, the federal budget deficit totaled "only" $1.6 trillion. That's down from over $4.0 trillion during the pandemic, but it has been widening again in recent months (chart). The bond market rarely reacts to the Treasury's monthly deficit release. That's remarkable considering that the Fed stopped buying and rolling over maturing Treasury securities last

Ed Yardeni

Federal Net Interest Outlays: Time to Worry?

Jan 16, 2023 1 min read paid

The latest federal budget data were released last week. Over the past 12 months through December, the deficit was $1.4 trillion with outlays of $6.3 trillion and receipts of $4.9 trillion (chart). Among the fastest growing outlays is net interest paid by the federal government. It soared to a record $517.7 billion over the 12 months through December (chart).

Ed Yardeni

Is Gridlock In Washington Bullish for Stocks?

Nov 7, 2022 2 min read

It is widely believed that political gridlock is bullish for stocks in the US. The market is happiest when our constitutional system of checks and balances is working. Therefore, a divided government is preferable to a unified government when one party controls the White House and both houses of Congress. So a widely expected "red wave" tomorrow should be bullish for stocks. We have previously observed that the

Ed Yardeni

Inflation Boosting Tax Receipts

May 16, 2022 1 min read

It’s good to be the King! You can spend lots of money by printing it. If you still have a fiscal deficit, the resulting inflation can help to narrow it by boosting tax receipts. Here in the US:

Ed Yardeni

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In Government We Trust

Federal Net Interest Outlays: Time to Worry?

Is Gridlock In Washington Bullish for Stocks?

Inflation Boosting Tax Receipts