There has been increasing concern for the potential sharp rise in interest rates over global inflation that occurred this past week. The Fiscal stimulus puts more money in consumers pockets but rising inflation and increasing interest rates drops their purchasing power .
The Wall Street Journal reports that the movement to date on inflation and interest rates has thus far been minuscule, it really doesn’t rate as a concern to the income that is coming from tax cuts which correspondent, Greg IP, report thats have set the economy up for a strong and secure 2018 and 2019 but a risk for recession in 2020.
The recent tax cuts and jobs act and budget which both act as a stimulant to the economy. The US government borrowing is headed for 5 percent of GDP by 2019. This expansion in fiscal policy is set to keep demand rising in the US as the economy faces ever tighter constraints on supply. The economy is almost at full utilization and will result in difficulties responding to all such demands which will result in the inflation mentioned earlier. While concerns over inflation continue, dramatic changes have yet to occur, it is projected that it will occur just in time for the 2020 election.