Analyst: US federal spending the biggest threat to disinflation & lower Fed interest rates

This via analysis from investment bank Piper Sandler should be no surprise to anyone:

• U.S. federal spending “is the biggest threat to disinflation and lower interest rates”

Piper Sandler cite a projected $1.8 trillion deficit in the 2024 fiscal year, or 6.5% of GDP:

• “High government spending–federal, state, and local–is measurably supporting GDP, and keeping inflation sticky,”
• persistent deficits “weigh on potential GDP, depressing incomes & living standards, while lifting the poverty rate.”

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Yep, and of course, being an election year we can expect all sorts of extra pork barrelling ahead.