In the US, President Trump has proposed a $4.4trn federal budget for 2019 that seeks to reduce domestic programs such as Medicare in favour of higher spending on the military and immigration enforcements, points out the research team at Deutsche Bank.

Key Quotes

“The plans will see the deficit almost double in FY19 to $984bln and rise $7.1trn over the next decade. Mr Trump said he would push for a “reciprocal tax” on imports against higher tariff countries without providing details and reiterated his $1.5trn infrastructure plan of which $200bln federal funds will act as seed funds to incentivise further spending by state and local government as well as the private sector. Notably, both Reuters and NY Times noted Presidential budgets are rarely enacted by the Congress. The budget director Mulvaney called the plans as a “messaging document”, so we’ll wait and see if these messages will translate into any reality.”

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