Are The Markets In For Another Fiscal Crisis?
The stock markets have not been exhibiting any positivity and analysts are warning of a possible fiscal crisis.
While there have been many factors affecting the US stock market, one of the latest news to blow it out of proportion has been the fact that the Congress has agreed on indulging in a spending plan that will increase discretionary spending by as much as $300 billion. The news has genuinely sent the markets out of proportion and analysts are warning that the markets are in for another fiscal crisis.
The new budget assisted in ending a small government shutdown. The US government recently had a shutdown and people were worried. However, the big spending has sort of pulled it out of the danger zone but people are questioning about the fiscal stability. As the debt will increase by $420 billion in the next decade, the budget deficit will go above $2 trillion. As a result of the news, the stocks suffered a blow.
The volatility of the market was observed on Friday as it whipped back and forth. There is a lot of pressure on the market and unfortunately, it is not being able to withhold it. The US stock market is a sensitive issue and is affected by the smallest or biggest of news. While there have been a lot of factors affecting the US stock market, this decision of the Congress has sent it in a financial rut.
There are many other projects under the pipeline of the US government and those all could affect the stock market both positively or adversely. Say the upcoming decision of the US government to spend trillions on the bus projects and public transportation could send the markets both positively high or low.
Tax cuts, big spending and deficits are some of the most major factors that give the stock market a run for its money. The Congress’s new decision to make some changes in its spending is one of the decisions that has blown the stock market out of proportion and analysts are warning of a fiscal crisis.