US Budget Deficit Soars to $1.7 Trillion, Stoking Debt Concerns Despite Minimal Impact from Foreign Wars
-
The US budget deficit hit $1.7 trillion in fiscal year 2022, twice as high as the prior year, raising concerns about debt sustainability.
-
Funding wars in Israel and Ukraine would increase deficit spending and require more bond issuance, but impact is expected to be small relative to total debt.
-
Other factors like higher interest rates and inflation are weighing on bonds more than deficit currently.
-
Investors are selling bonds anticipating the Fed will keep rates high to fight inflation.
-
Credit rating downgrades suggest US debt is seen as riskier, also pressuring bond prices.