The U.S. deficit, interest rates, and private sector interplay

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The U.S. deficit, interest rates, and private sector interplay

By Atul Bhatia, CFA U.S. growth is solid, but perhaps not stable The U.S. economy has shown unexpected resilience during the post-pandemic era, confounding both U.S. Federal Reserve and private sector forecasters. One of the key factors, we believe, has been the expanding federal budget deficit. The growth in debt-funded government spending contributed to demand, helping push up household wages, corporate profits, and ultimately asset prices. T…