Trump Budget Director Admits Infrastructure Plan Will Cause Interest Rate Spike

The Federal Reserve has been using Trump's planned infrastructure spending program as a partial excuse for increasing interest rates despite the risk to stock markets.  Well, that infrastructure program is now being released.  Expect the Fed to increase interests rates exponentially for the next year.  Also expect that Treasury yields will spike to danger levels.  Currently, 10 year yields are rocketing up to the 3% high tension mark.  We shall see how this affects markets over the course of the next week...

 

The U.S. will post a larger budget deficit this year and could see a “spike” in interest rates as a result, but lower deficits are possible over time based on sustained economic growth from Donald Trump’s tax cuts, said Budget Director Mick Mulvaney.

Mulvaney spoke on “Fox News Sunday,” a day before the White House is expected to release 2019 spending proposals -- and after weeks in which financial markets have been spooked by prospects for rising inflation tied to higher deficits and lower taxes.

“This is not a fiscal stimulus; it’s not a sugar high,” Mulvaney said on of the president’s economic program, including the $1.5 trillion tax cut passed in late 2017.

“If we can keep the economy humming and generate more money for you and me and for everybody else, then government takes in more money and that’s how we hope to be able to keep the debt under control,” Mulvaney said.

In a separate interview on CBS News’s “Face the Nation,” Mulvaney said rising budget deficits are “a very dangerous idea, but it’s the world we live in.”

His comment echoed Trump’s Feb. 9 tweet that Republicans “were forced to increase spending on things we do not like or want” to secure Democratic votes for the sharp buildup in military spending wanted by the White House and the Pentagon.


READ MORE HERE:

https://www.bloomberg.com/news/articles/2018-02-11/u-s-budget-director-warns-interest-rates-may-spike-on-deficit

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