Publications

The Washington Post reports that the U.S. government is set to borrow $955 billion this fiscal year, an 84% increase from last year. The Congressional Budget Office stated in a report that the sharp increase in borrowing was due to lower tax receipts that are the result of recently-passed tax cuts, which may complicate future negotiations on spending bills in Congress. WaPo

Nick Timiraos of the Wall Street Journal writes that there are a number of challenges facing new Fed chairman Jerome Powell, including the possibility of an overheating economy. Timiraos argues that rising long-term bond yields, a historically tight labor market, and inflated asset prices all could affect the Fed’s decisions on interest rate hikes in the coming months. WSJ

The Wall Street Journal reports that Americans poured money into charitable-giving vehicles known as donor-advised funds at the end of 2017 before the new tax code took effect. The new tax code, which saw the standard deduction double for single filers and married couples, is expected to result in fewer charitable donations because fewer Americans will itemize their deductions. WSJ

The Wall Street Journal reports that the Federal Reserve held short-term interest rates steady after its recent meeting. Officials also said that they expect inflation to pick up this year, acknowledging a recent increase in market-based inflation expectations. WSJ

According to the Wall Street Journal, the U.S. homeownership rate rose in 2017 for the first time in thirteen years. Housing experts say that the increase in homeownership was driven by millennials, who saw the largest jump in ownership rates of any age group, from 34.7% to 36%. WSJ

In a Wall Street Journal op-ed former vice-chair of the Federal Reserve Alan Blinder argues that now is the wrong time to expand the federal deficit. Blinder contends that borrowing for productive purposes, such as combating the effects of a recession, makes sense in specific instances, but the relative health of the U.S. economy at present means there is no need for stimulative fiscal measures. WSJ

The Financial Times reports that U.S. trade representative Robert Lighthizer says that NAFTA renegotiations are moving too slowly. Lighthizer also said that the group of negotiators had begun to make progress on some of the more difficult points of contention, including rules for domestic content in automobiles and a future review process for NAFTA. FT

In a Wall Street Journal op-ed dean of the Tuck School of Business Matthew J. Slaughter argues that withdrawing from NAFTA would cost the U.S. $50 billion a year in gross domestic product. Slaughter contends that GDP would suffer because the end of NAFTA would make it more difficult for U.S. multinational firms to invest in Canada and Mexico and would also limit export opportunities for small U.S. firms. WSJ