Spending Fight Shows Limits of Trump Power to Change Fiscal Path
Published On Dec 24, 2024, 1:40 PM
In early December 2024, Elon Musk and Vivek Ramaswamy, appointed by President-elect Donald Trump, proposed sweeping plans to cut federal spending and eliminate waste. After a tense standoff, they helped defeat a major spending bill over excessive pork spending, raising concerns about potential government shutdowns. However, budget experts are skeptical about their ability to make significant changes in federal fiscal policy, especially as the national debt is projected to skyrocket to 166% of GDP by 2054 from 99% at the end of 2024.
Stock Forecasts
TLT
Negative
Given the ongoing challenges with federal spending and the skepticism surrounding Trump, Musk, and Ramaswamy's effectiveness in controlling the national debt, interest rates and inflation may remain elevated. Additionally, their policies regarding fiscal restraint could affect investor confidence in government bonds or sectors heavily reliant on government contracts, like defense or infrastructure.
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