For the first time ever, the federal budget deficit is over $1 trillion–and we still have three more months to go in the fiscal year!
The Treasury Department said that the deficit for June was $94.3 billion, so that pushes the fiscal year total to nearly $1.1 trillion. The numbers here are staggering.
What this means for investors is that the Treasury will have to auction off more and more debt. In turn, that will lead to higher interest rates which will also punish mortgages. This may have the net effect of delaying any economic recovery.