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Budget deal removes uncertainty, but adds to debt risk

The budget deal agreed by the Trump administration and Congress removes the risk of a damaging debt ceiling crisis in September and prevents a contraction in discretionary spending from October onwards. But our forecasts already assumed that the old spending caps would be over-ridden, so the deal doesn’t affect our view that GDP growth will slow from 2.3% this year to 1.2% in 2020.

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