Congressional Budget Office (CBO) Director Phillip Swagel warned the United States could suffer a similar market shock as seen in the United Kingdom during former Prime Minister Liz Truss’s brief stint leading Britain, citing the nation’s “unprecedented” fiscal trajectory.
In an interview with the Financial Times this week, Swagel discussed the country’s rising debt, while warning of the dangers of the U.S. facing “what the U.K. faced with former prime minister Truss — where policymakers tried to take an action, and then there’s a market reaction to that action.”
Truss roiled markets in October 2022 as she pressed for significant tax cuts, including changes lessening the tax burden on wealthier individuals without offsets, as well as other economic measures. The budget proposal spurred a major selloff of British debt, forcing U.K. interest rates to decades-long highs and causing the value of the…
