https://x.com/WallStreetMav/status/2026103508877893783
CBO projects deficits and debt to worsen sharply over the next decade
The CBO said that the deficit for fiscal 2026 – President Donald Trump’s first full fiscal year in office – will be about 5.8 percent of GDP, about where it was in fiscal 2025, when the deficit was $1.775 trillion.
But the US deficit-to-GDP ratio will average 6.1 percent over the next decade, reaching 6.7 percent in fiscal 2036 – far above US Treasury Secretary Scott Bessent’s goal to shrink it to about 3 percent of economic output.
Major developments over the last year are factored into the latest report, including Republicans’ tax and spending measure known as the “One Big Beautiful Bill Act,” higher tariffs, and the Trump administration’s crackdown on immigration, which includes deporting millions of immigrants from the US mainland.
Bond markets pricing in longer‑term fiscal stress
The bond market appears unworried about the next decade, even as tariff’s enactment and now reversal heightens global trade uncertainty. Look further out and Treasuries tell a different story.