From Investing.com: 2024-06-08 03:01:05

Bank of America economists discuss the fading fiscal impulse despite ongoing deficits, with a slowdown in private and public investment in Q1 2024 indicating a diminishing fiscal boost. The size of the deficit affects GDP level, but GDP growth depends on changes in the deficit year over year. The deficit doesn’t guarantee ongoing economic expansion, as a stable or contracting deficit post-expansion can lead to negative fiscal impulse. Fed Chair Powell’s comments highlight the unsustainable fiscal path, with current fiscal policy acting as a drag on growth despite elevated deficit levels.



Read more at Investing.com: Why is the fiscal impulse fading despite ‘unsustainable’ deficits? BofA discusses By Investing.com