“I could end the deficit in five minutes. You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election.”
– Warren Buffett

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.

To read the full report, click here.

BMO Private Wealth is a brand name for a business group consisting of Bank of Montreal and certain of its affiliates in providing private wealth management products and services. Not all products and services are offered by all legal entities within BMO Private Wealth. Banking services are offered through Bank of Montreal. Investment management, wealth planning, tax planning, philanthropy planning services are offered through BMO Nesbitt Burns Inc. and BMO Private Investment Counsel Inc. If you are already a client of BMO Nesbitt Burns Inc., please contact your Investment Advisor for more information. Estate, trust, and custodial services are offered through BMO Trust Company. BMO Private Wealth legal entities do not offer tax advice. BMO Trust Company and BMO Bank of Montreal are Members of CDIC.

^® Registered trademark of Bank of Montreal, used under license.