U.S. Budget Deficit Balloons to $1.7 Trillion in 2022, Stoking Debt Worries But Having Modest Impact on Bonds
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The U.S. budget deficit hit $1.7 trillion in fiscal year 2022, fueling concerns about debt sustainability.
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Funding wars in Israel and Ukraine would increase spending and the deficit, but likely only modestly based on the $86 billion proposal.
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Other factors like higher interest rates are weighing on bonds more than deficit concerns currently.
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Investors are selling bonds on expectations of higher rates for longer to curb inflation.
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Credit rating downgrades signal greater risk in holding U.S. debt, also impacting bonds.