Interest Rates May “Spike”

U.S. Budget Director warns that interest rates may ‘spike’ on the deficit.

According to Budget Director Mick Mulvaney, the U.S. will post a larger budget deficit this year.  As a result, we could see a “spike” in interest rates.  Even so, he believes that lower deficits are possible over time based on sustained economic growth from Donald Trump’s tax cuts.

“This is not a fiscal stimulus; it’s not a sugar high,” Mulvaney said on of the president’s economic program.

 “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.”
U.S. Treasury yields have been rising in recent weeks on worries that inflation is heating up as the spending package juices an economy already souped up by tax cuts and at or near full employment.