US budget deficit hits USD 134 bln in October

WASHINGTON, US budget deficit hit USD 134.5 billion in October, the month that marks the beginning of fiscal 2020, compared to USD 100 billion in October 2018, according to official data released Wednesday.

The Treasury Department indicated that federal revenues fell by 2.8 percent on a year-ago basis to USD 245.5 billion, whereas spending rose by 7.6 percent to USD 380 billion.

Meanwhile, Federal Reserve Chairman Jerome Powell said during a testimony in Congress that looking ahead, “my colleagues and I see a sustained expansion of economic activity, a strong labor market and inflation near our symmetric two percent objective as most likely.” “Noteworthy, risks to this outlook remain,” he said, noting “in particular, sluggish growth abroad and trade developments have weighed on the economy and posed ongoing risks.” He stressed that “persistent” below targeted inflation could lead to “an unwelcomed downward slide in longer term inflation expectations.” He noted that these developments will continue to be monitored and “assess their implications for US economic activity and inflation,” adding “we also continue to monitor the risks to the financial system.” “We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook of moderate growth, a strong labor market and inflation near our symmetric two percent objective,” he said.

The Federal Reserve chief also affirmed “we will be monitoring the effects of our policy actions, along with other information bearing on the outlook, as we assess the appropriate path of the target range for the federal funds rate.” “Of course, if developments emerge that cause a material reassessment of our outlook, we would respond accordingly. Policy is not on a preset course,” he stressed.

On the federal budget, Powell said it is on an “unsustainable path with high and rising debt,” but that over time, “this outlook could restrain fiscal policy makers’ willingness or ability to support economic activity during a downturn.” He voiced concern that “high and rising federal debt can, in the longer term, restrain private investment and thereby reduce productivity and overall growth.” Last month, the Federal Reserve cut interest rate for the third time this year by a quarter of a percentage point to a range of 1.5 to 1.75 percent.

Source: Kuwait News Agency