Salient to Investors:

The CBO predicts:

  • A declining jobless rate will raise tax revenues and shrink the US budget deficit to $469 billion in 2015, $506 billion in the 12 months ending September 30 – versus predictions of $492 billion in April and $680 billion in 2013, and a record $1.4 trillion deficit in 2009.
  • The budget deficit will start rising again in 2018 as the gap between spending and revenues grows relative to the size of economy, and federal debt climbs.
  • The budget deficit will be 2.9% of GDP in 2014 and 2.6% in 2015 – versus 1.1% in 2007.
  • The US economy will grow 1.5% in Q4 2014 versus 3.1% predicted in February.
  • Unemployment will average 6.2% in 2014, 5.9% in 2015, and slack in the labor market will largely disappear by the end of 2017.
  • The 3-month T-bill will remain near zero until half2 2015, and increase to an average of 2.1% in 2017.
  • Monetary policy will continue to support economic growth during the next few years because of slack in the labor market and inflation below the Fed’s goal.

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