This Month in Fiscal News: August 2016

Congress reconvenes next week, facing a September 30 deadline to pass a spending bill that will avert a government shutdown. Conservative groups are pushing congressional Republicans to punt the completion of this year’s spending work into early 2017 when a new president and Congress could negotiate a final deal, according to the Washington Post.

Janet Yellen, speaking from Jackson Hole last Friday, signaled that the Fed may raise interest rates in coming months. “In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months,” the Federal Reserve chairwoman said, according to the New York Times.

While the housing market, job market, wages, and consumer spending may be showing signs of improvement, the long-term fiscal outlook is still dire, according to updated projections released by the Congressional Budget Office. The budget deficit will reach $590 billion this year, growing as a share of GDP for the first time since 2009.

Although increasingly optimistic about the state of the economy, Americans remain concerned about the nation’s fiscal future. This month’s Fiscal Confidence Index was 50.

Out on the campaign trail, candidates Donald Trump and Hillary Clinton delivered economic speeches, further highlighting their differences on key economic and fiscal issues, including tax policy. 

Image credit: Photo by Caleb Smith