The Quiet Crisis Of US Fiscal Deficits

The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy · Oct 19, 2026 · 10m · transcript

With the U.S. budget deficit swelling to nearly two trillion dollars for fiscal 2026, Lucas and Luna examine why this number matters more than any single interest rate decision. They look at how a twelve percent jump in deficits collides with real GDP growth of just two point two percent, creating a structural tension that bond yields and inflation expectations are already pricing in. This episode moves past the political noise to analyze the mechanics of debt servicing costs, the role of the Federal Reserve's balance sheet, and what a persistent gap between nominal growth and borrowing…