It remains to be seen whether the election of Donald Trump will “make America great again,” but it will likely require the US Treasury to borrow more.
That’s according to a team of Goldman Sach’s strategists led by Jan Hatzius.
The bank said in a note out January 5 that it had increased its projections for net marketable borrowing by about $250 billion by fiscal year 2019.
The new borrowing forecast aligns with Goldman’s revised budget deficit forecast.
They expect the deficit to increase to $650 billion in 2017. By 2020, the deficit should balloon to a whopping $1.05 trillion.
Goldman said the revisions takes into consideration Trump’s policy proposals.
“As a result of the November election, policymakers will now need to tackle an additional challenge: financing a likely increase in borrowing due to corporate and personal income tax reform,” they said.