The U.S. budget deficit keeps increasing. In the past, big increases in spending were associated with unemployment peaks, and it was basically a transfer from public pockets to private ones to restore balance. In the current case, the deficit is increasing even when unemployment is historically low. Interest expense increases due to higher rates, the #ukraineconflict, support programs for banks and other social programs, are weighting on the deficit at this point, which means that it could even speed up more when unemployment actually rises. The US economy continues to be one of the strongest in the world, if not the strongest, but it continues to push its limits with a level of spending more characteristic of war time. Yesterday night, Congress postponed a government shutdown for 45 days, and that has provided some relief to the long end of the curve. But the situation keeps deteriorating.
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