MBCC TH 25th January'24 - "US GDP great but borrowed growth, how long can this debt deficit go on, and why the Fed is in a bit of a pickle! Why did Oil break out, and where do we think it goes?

Most commentators say how fab the Q4 GDP growth was, but when you look at how they got there, its perhaps not as much! According to ZH, “Q4 GDP rose by $329 billion to $27.939 trillion, what is much more disturbing is that over the same time period, the US budget deficit rose by more than 50%, or $510 billion. And the increase in public US debt in the same three month period was a stunning $834 billion, or 154% more than the increase in GDP. In other words, it now takes $1.55 in budget deficit to generate $1 of growth... and it takes over $2.50 in new debt to generate $1 of GDP growth!”

We are borrowing from the future to make it today, will this last? What will FOMC Jan look like and what can Yellen do now as her petty cash account is almost going to 0?

It’s all one big liquidity trade! And the Fed knows it….but into election, can they spend print more?