Right now, there are two important policy changes that have come out in 2025. The first is DOGE aimed at eliminating waste, fraud and abuse in the government. The second is tariffs aimed at making global trade more fair

Which matters more?

The chart today looks at each in terms of their size relative to the GDP of the US. The scales are different to

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Item #1: Fiscal Deficits

U.S. fiscal deficits were huge in 2020 and 2021, but contracted in 2022 as most of the emergency programs dwindled.

However, by 2023, fiscal deficits began rising again , mainly due to increased interest expense. This is where fiscal dominance became rather sustained: the Fed’s interest rate hikes, which were meant to slow

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One of the primary themes that I’ve frequently written about going back to 2020 and that has guided a lot of my investment decisions, is the concept that the United States is in the process of entering fiscal dominance.

This means that fiscal deficits are larger and more impactful for the economy and for financial markets than they used to be, and

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