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Blokland’s daily sketch

Blokland’s daily sketch

14-11-2019

USD 1 trillion

  • Jeroen Blokland
    Jeroen
    Blokland
    Head of Multi Asset

The 12-month cumulative US budget deficit rose to more than USD 1 trillion in October. It was the first time in six years that the gap between federal expenditures and receipts crossed the threshold of USD 1 trillion, pushing the deficit to 4.6% of GDP, as today’s chart by Bianco Research shows. Obviously, there have been bigger deficits in history, but this one comes at a time of decent and stable economic expansion. If anything, government policy has been pro-cyclical instead of the more prudent anti-cyclical. With government debt to GDP above 100%, there will also be less room for fiscal stimulus if the economy turns sour. Also, this increases the risks of another government shutdown in the upcoming election year.

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As a senior portfolio manager I use charts to illustrate financial issues every day. I tweet my favorites as @jsblokland and was named 'one of the 50 most important people for investors to follow in 2018' by MarketWatch.
Previous editions of the daily sketch can be found on my personal financial markets blog. All graphics provided are collected from Bloomberg data and public websites. They do not always reflect my personal opinion and may also not necessarily reflect the opinion of Robeco. Please cite all references or quote the original source if replicating content.

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