Yesterday, the Congressional Budget Office (CBO) released its latest Budget and Economic Outlook. For those of you who might not be familiar, this report projects the nation's fiscal and economic future over the next decade. And we believe, over the course of the next ten years, the issues laid out in this report will be among the top three that shape the future of our profession and Finseca writ large. 

Per the Committee for a Responsible Federal Budget, here are a couple of the key takeaways:

• Debt is on course to reach a record 118 percent of GDP by 2033. CBO projects debt held by the public will grow $22 trillion over the next decade, breaching $46 trillion by the end of Fiscal Year (FY) 2033. Debt will grow from 97 percent of Gross Domestic Product (GDP) in 2022 to 118 percent by 2033; it could grow to more than 130 percent of GDP if policymakers extend various expiring policies.  
• Deficits will double from $1.4 trillion today to almost $2.9 trillion by 2033. Deficits will total 6.1 percent of GDP ($20.3 trillion) over a decade and reach 7.3 percent of GDP by 2033 – the highest ever outside of a national emergency. 
• Spending on health, retirement, and interest will grow rapidly while revenue fails to keep up.Spending will grow from 23.7 percent of GDP in 2023 to 25.3 percent by 2033, while revenue will fall to a low of 17.4 percent of GDP in 2025 before rising to 18.1 percent in 2030 and beyond. Interest costs alone will reach a record 3.6 percent of GDP – $1.4 trillion – by 2033. 
• Three major trust funds will be insolvent this decade, with the Highway Trust Fund running out of money in 2028 and both the Social Security Old-Age and Medicare Hospital Insurance (HI) trust funds running out of reserves in 2033. Upon insolvency, CBO estimates that Social Security benefits will be cut abruptly by about one-quarter. 
• Surging inflation will slowly normalize while interest rates remain high and economic growth weakens. CBO projects Consumer Price Index inflation will be 4.0 percent in 2023 and normalize around 2.2 percent per year beyond that. The economy will stagnate in 2023 as unemployment temporarily rises above 5 percent before falling to 4.5 percent by 2026. Meanwhile, CBO projects the ten-year treasury yield will remain around its current level of 3.8 percent, having risen from less than 1 percent in late 2020 to 2 percent in early 2022.