Trump’s budget chief sees possible rate spike

The U.S. will post a larger budget deficit this year and could see a spike in interest rates as a result, but lower deficits are possible over time based on sustained economic growth from President Donald Trump’s tax cuts, Budget Director Mick Mulvaney said Sunday.

Mulvaney spoke on “Fox News Sunday” a day before the White House is expected to release 2019 spending proposals. Financial markets have been spooked by prospects for rising inflation tied to higher deficits and lower taxes.

“This is not a fiscal stimulus; it’s not a sugar high,” Mulvaney said.