Democrats embrace fiscal tightening

The Inflation Reduction Act passed by the Senate over the weekend will, despite its name, do little to rein in inflation, but the climate provisions will make a meaningful difference in efforts to reduce GHG emissions. The bill represents a cumulative fiscal tightening of slightly more than $300bn, or 1.3% of GDP, over the next decade, which is a marked change from the fiscal packages passed by both parties in recent years that all added to the deficit. CPI Drop-In (10^th Aug): Will July finally mark the turning point for US inflation? Join our US Economics team for a briefing shortly after the CPI release about the data and likely Fed response. Register now.