Budget Deficit Threatens U.S. Economy as Markets Feel Ripple Effects

The U.S. budget deficit is a growing concern, with potential implications for the economy and markets alike. Citigroup’s equity strategist, Scott Chronert, highlights that recent legislation is unlikely to significantly reduce this deficit. Instead, he predicts a projected increase of $600 billion by 2025 due to new regulations. While these actions could boost economic activity through increased treasury issuances, higher interest rates may also negatively impact the stock market. 7