The US Fiscal State Of Play

Northern Trust examines major fiscal and trade developments impacting global markets, with a focus on the U.S., tariffs, and Germany’s economic pivot.  

Key Takeaways:

• U.S. Fiscal Outlook: Budget deficits remain a structural risk, with ongoing debates over spending cuts and tax reforms to address the $2 trillion annual shortfall.  
• Trade Tensions Escalate: Tariffs on Canada, Mexico, and China raise stagflation risks, with potential GDP declines of 1%+ and inflation increases of 0.5%.  
• Germany’s Economic Shift: Constitutional changes will allow **€500 billion in infrastructure spending, boosting growth but raising bond yields.  

Read the full report for deeper insights into fiscal policy shifts and investment implications.