Economics & US Rates: The curious case of the 2023 fiscal expansion

The FY23 deficit is tracking about $1.5 trillion, but only thanks to the odd accounting of student debt forgiveness. Excluding student debt, the deficit would be closer to $1.8tn, and almost $1tn larger than in FY22. This widening should partly reverse as we move into FY24, when we project a deficit around $1.6tn. This year’s “stealth stimulus” may help explain the economy’s resilience to rapid interest rate hikes.

 

Speakers
Michael Feroli, Chief US Economist
Phoebe White , Fixed Income Strategy 
Afonso Borges , Fixed Income Strategy 

 

This podcast was recorded on Aug. 1, 2023.
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