A Year Out from the Presidential Election, America’s Fiscal House Is Not in Order

Investors are increasingly alarmed by the state of America’s finances, which deteriorated further in the fiscal year that just ended. Given the political divide in the US, however, it’s hard to imagine the fiscal situation improving any time soon—especially as a year out from the next presidential election, Americans don’t consider it a major priority. But barring a dramatic turn of events, the sorry state of public finances could keep interest rates elevated, with the destabilizing effects that this entails.