Weekly Strategy Perspective - Riding Herd on a Budget Deal

The Through Line: As U.S. House Speaker Mike Johnson tried to herd the cats toward passage of a budget reconciliation deal, bond vigilantes kept a close eye on the details. The U.S. budget deficit run rate – and the accumulated total debt – already stands at a peacetime high and bond holders are watching carefully to be sure the next budget doesn’t materially add to the pile. While equity markets had largely shrugged off the machinations until recently, the devilish details will matter for long-term fundamentals and market health.