CBO deficit numbers
- Says budget deficits will "grow substantially" over the next few years, then stabilize in 2023
- Sees $1 trillion deficit in 2020, two years earlier than previously
- Forecasts 2018 growth of 3.3% compared to 2.0% in June report
- Sees 2.4% growth in 2019
- Forecasts 2018 PCE inflation at 1.8% compared to 2.0% prior
- Cumulative deficit of $11.7 trillion for 2018-2027, raising prior forecast by $1.6 trillion
The changes come as a result of the tax cut. What surprises me is the forecast for lower inflation despite higher growth.
However, these are forecasts just like any other forecast: subject to change.
I don't think markets are particularly concerned about deficits. The US can still borrow for 30-years at 3.03%. However markets are increasingly concerned about what Congress might do to bring down deficits.
