Wells Fargo strategists Boris Rjavinski.....>

US VIEW: Wells Fargo strategists Boris Rjavinski and Zachary Griffiths said that

the "U.S. long-term fiscal standing becomes more suspect" as "many signs point

to a worsening budget deficit." 

- "The WFS economics team calls for the deficit to hit $750 billion in 2018,

then reach $900 billion in 2019," they said. "Moreover, there are significant

upside risks to this already worrisome baseline view. We still expect tax reform

to take place in early 2018, with the statutory corporate tax rate falling from

35% and individual tax cuts to go along with it." 

- They add that "the ambitious tax reform plans announced by the White House and

Republican leaders in Congress potentially could add $2 trillion to the

government deficit over 10 years, even without an infrastructure spending

package. Although a second-order effect, the government's debt service cost may

rise meaningfully driven by the combination of growing debt and higher yields.

It is enough to make fiscal hawks lose sleep."