Yields on 10-yr Treasuries are now the highest vs 2-year rates since 2022.
It's unclear whether this is a healthy normalization - a reversion back to the typical relationship of long-term yields being higher than short-term ones - or a sign of stickier inflation and deficit fears. Souce: Bloomberg, Lisa Abramowicz
US Federal finances illustrated in one chart
Source: JP Morgan
Over the last 10 years, US Federal Government Tax Revenue has increased 60% while Government Spending has increased 99%.
Does the US need higher taxes or less spending to balance the $2.1 trillion budget deficit? Source: Charlie Bilello
France has always missed its deficit forecasts, always.
It runs 6% fiscal deficit during good times. With the current political paralysis there will be no long overdue structural reforms, especially of pensions. It will miss current forecasts as well. Could the next Euro crisis start in France? Source: Michel A.Arouet Chart @OxfordEconomics
Global Macro: Diverging trends for 2025 real GDP growth
🚨 US: While the US economy maintains relatively high growth, a slight deceleration is expected in 2025, influenced by factors like market adjustments and global economic shifts. 🚨 Europe: The Euro Area is set for continued growth, with projections pointing to a steady increase in GDP, particularly in France and Germany. 🚨 China and India: Both countries have been driving global growth, but their expansion is expected to slow down. China’s growth could be further affected by the potential impact of Trump's tariff increases, which may challenge the economy in 2025. Source: Genuine Impact, Goldman Sachs
The US Treasury's annual interest expense surpassed $1.117 trillion this year — making it the second-largest government expense.
At the current issuance schedule & interest rates, it will surpass Social Security at $1.46 trillion in 2025 to become the largest government expense. Source: Bloomberg, Joe Consorti
The Federal Reserve has reduced the size of its balance sheet by 10.7% this year, the largest percentage decline of any year on record.
Source: Charlie Bilello
Italy and France are exceeding the EU’s 3% of GDP deficit rule by nearly double!
Chart: @robin_j_brooks, Alex Joosten @joosteninvestor
