CBO chief warns it’s ‘probably not plausible’ that a strong economy alone can steady U.S. debt as 5%-6% growth is needed—more than Bessent’s 3% view
"So then we're left with changes in revenues and changes in spending, and those are inherently political choices."
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# Summary The Congressional Budget Office director warned that the U.S. economy would need 5-6% annual growth to stabilize federal debt without policy changes, contradicting Treasury Secretary Bessent's more modest 3% growth forecast and suggesting that deficit reduction will require politically difficult decisions on taxes and spending rather than economic growth alone. This analysis implies markets may face headwinds from either slower-than-needed growth or from fiscal policy changes that could impact corporate tax rates and government spending—both key drivers of equity valuations and bond yields.
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