Staying on Budget- Earnings: GEI, CPG, ARX, ERF, NXR
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The temptation into war delivered smack in the middle of US budget preparations had to be shrewdly timed. The response from the US to the horrible attack on women and children in Syria was swift and efficient. Technology has advanced productivity in every sector of the economy, war is no exception.
The US budget is still a work in process, military spending plans are way up, environmental departments are on the chopping block. Still to be finalized are tax reductions and infrastructure spending programs, none of which would be helped from entrapment in a costly war.
Deficit neutral has been the theme so far for the US budget. Staying on this track will keep deficits and interest rates from rising. Yields on 10 year benchmark bonds have ranged between 2.3% and 2.6% since Trump was elected, this was after having increased by about 1% in the lead up to, and just following the US election. The economic comments this week identify the larger risks that could possibly impact the outlook for interest rates. These include the political uncertainty when missiles start to fly, or if central banks attempt to reduce the debt on their balance sheets.
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