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The OBBBA is not a budget buster despite talking points to the contrary, as the budget impact relative to current law is actually an annual reduction in the deficit of $150 billion per year, with another up to $150 billion
June 2025 Commentary And Economic Outlook
Summary
- The OBBBA is not a budget buster despite talking points to the contrary, as the budget impact relative to current law is actually an annual reduction in the deficit of $150 billion per year, with another up to $150 billion coming from higher tariffs.
- The US's enormous budget deficits cause US rates to be among the highest in the world, which drives the dollar significantly higher and results in large trade deficits.
- We forecast that there will be an uptick in inflation due to higher oil prices over the next couple of months. However, thereafter, we expect inflation to continue to moderate as the shelter component starts to reflect market prices for rent.
- We expect oil prices to moderate after more clarity develops in the Middle East. We also believe the economy continues to decelerate as housing starts decline and commercial construction also decelerates.
- Wecontinue to be bullish on Treasury bonds despite the recent sell-off, with a3.75% year-end yield target on the 10-year.
Infrastructure Capital Advisors ("Infrastructure Capital") is a leading provider of investment management solutions designed to meet the needs of income-focused investors. Jay Hatfield is CEO and CIO of the investment team. Mr. Hatfield is the lead portfolio manager of the InfraCap Small Cap Income ETF (NYSE: SCAP), InfraCap Equity Income Fund ETF (NYSE: ICAP), InfraCap MLP ETF (NYSE: AMZA), Virtus InfraCap U.S. Preferred Stock ETF (NYSE: PFFA), InfraCap REIT Preferred ETF (NYSE: PFFR), and a series of private accounts. Infrastructure Capital frequently appears on or is quoted in Fox Business, CNBC, Barron's, The Wall Street Journal, Yahoo Finance, TD Ameritrade Network, and Bloomberg Radio/TV. The team at Infrastructure Capital publishes a monthly market and economic report, quarterly commentaries, investing primers, and asset class and strategy research. In addition, Infrastructure Capital hosts a monthly webinar and attends industry conferences in an effort to provide educational investing resources.