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Mohamed A. El-Erian, president at Queens' College, University of Cambridge, points out that the U.S. budget deficit climbed to nearly $2 trillion ($1.993 trillion) for the fiscal year ending September 30.
He highlights that despite solid economic conditions, the U.S. continues to run a deficit around 6% of GDP, which remains historically notable.
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El-Erian has previously highlighted the role of inflation data ahead of monetary policy decisions, noting the importance of U.S. CPI and core inflation numbers before Federal Reserve meetings. In a separate commentary, he observed the rise of the U.S. 10-year Treasury yield to 5.22 percent, its highest since 2002. These developments form the backdrop to the current fiscal deficit discussion.