Deficit Dilemma Update: Inflation and Sectoral Shifts in a New Administration

November 27, 2024

  • The DOGE (Department of Governmental Efficiency) Committee faces significant challenges in addressing the $2 trillion deficit, with most expenditures politically untouchable.
  • Inflation is expected to rise by 2025, driven by persistent deficit spending and nominal GDP growth.
  • Gold remains a strong long-term hedge despite recent sell-offs, with equities favored over bonds during inflation.
  • Natural gas may see growth due to rising electricity demand, while crude oil demand remains stagnant.
  • Healthcare reform faces resistance due to lobbying, despite inefficiencies driving up costs significantly.
  • Subsidies for green energy and electric vehicles may decrease as deficit concerns take priority.