Since the debt ceiling crisis, the US has already added nearly $1.5 trillion in debt.
Meanwhile, tax receipts are down sharply this year.
We are spending more and making less, a recipe for disaster.
Follow us @KobeissiLetter for real time analysis as this develops.
— The Kobeissi Letter (@KobeissiLetter) August 6, 2023
US Government To Borrow $1Trillion in Q3 As Deficit Widens and Debt Servicing Costs
The US government is set to borrow $1.007 trillion in Q3, a considerable rise from the previous estimate of $733 billion, due to increasing fiscal deficit and dwindling cash reserves. The federal deficit has surged by 170% to $1.39 trillion in the nine months through June. Spending outstripped income, with $4.80 trillion spent against $3.413 trillion in generated revenues. The US pays 2.76% interest on its debt, the highest in over 11 years. Despite these, Fitch retains the US’s AAA rating, but places it on negative watch due to fiscal and debt trajectories.
US Government Shutdown Threat Builds
A looming fiscal standoff in Washington could disrupt the Federal Reserve’s upcoming policy decisions and further dent America’s global economic reputation. Fitch Ratings recently downgraded the US debt’s AAA status, intensifying political tensions over spending. With Congress not addressing these issues, the risk of a government shutdown after September 30 rises. This situation could affect the Fed’s September interest-rate decision and impact consumer spending and GDP growth.
Vivek promises to fire 90% of the Federal Reserve's staff if elected in 2024. pic.twitter.com/SZB2MGox0o
— Citizen Free Press (@CitizenFreePres) August 7, 2023
BREAKING NEWS
CHINA’S CENTRAL BANK ADDS MORE GOLD FOR A NINTH STRAIGHT MONTH
China continues to stockpile. pic.twitter.com/oN6C6YGLWF
— Gold Telegraph ⚡ (@GoldTelegraph_) August 7, 2023