Monthly Budget Watch
The Global Budget Watch Monitor is a monthly analysis of fiscal data from the world's largest economies, created by Tim Congdon and Ewen Stewart from the Institute of International Monetary Research.
- Previous issues can be found on our Monthly Budget Watch Archive page.
September 2026 summary
August was a difficult month for investors in sovereign debt. Markets have woken up to the scale of new issuance globally, while inflation prospects are clouded by military and geopolitical headwinds, particularly in the Middle East. The oil price has now been above $100 a barrel for a fortnight, with no early end in sight. The US Federal deficit in August was $168b., substantially (no less than $177b.) lower than in August 2025. But hopes for a return to fiscal seriousness were spoilt by President Trump’s political showmanship. His offer of $5,000 of 2027 tax cuts for each adult, on condition that the Republicans hold Congress in the mid-term elections, would have a potential 2027 cost of some $1,300b. Recent adverse moves in most sovereign yields have been swift. For example, French and Italian 10-year bond yields increased by 58 and 43bp respectively in a month, US and German similar yields by 32bp each, and the UK by 25bp. The trouble has been particularly serious for Japan. The 10 year bond yield was practically zero in the seven-year period of 2016 – 22 inclusive but has flirted with 3% in recent sessions. This is the highest number since the 1990s. (Ewen Stewart)
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