Market is 'getting SPOOKED' by how much government is borrowing: Economist
Economists and analysts discussed former President Trump's promise to give $5,000 to all American adults if the GOP wins the midterms, noting that the plan is fiscally implausible. Catherine Rampell calculated that the proposal would cost approximately $1.2-$1.3 trillion, which is far more than the estimated tariff revenue proposed to fund it. The panel also highlighted that the bond market is currently "getting spooked" by government borrowing, causing yields to rise, which would be exacerbated by such a spending initiative.
If implemented, such a large-scale payout without a clear funding mechanism would likely lead to significant inflation and further increases in interest rates, negatively impacting mortgage rates and the broader economy, contradicting the former president's claims of economic improvement.
The panel also discussed the broader economic message from Republicans ahead of the midterms, rising oil prices, and the Biden administration's handling of core inflation.
DONALD TRUMP MIDTERM ELECTIONS ECONOMIC POLICY INFLATION BOND MARKETS
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