U.S. fiscal deficit grows 12%, nearing $2 trillion

The United States’ budget deficit for the 2026 fiscal year reached nearly $2 trillion—a 12% increase over the previous year. A deficit of this magnitude forces the government to issue more debt, which can drive up interest rates on Treasury bonds and dampen appetite for riskier assets, such as stocks and investments in emerging markets.

A widening U.S. deficit puts upward pressure on American bond yields, which typically hurts emerging markets—including Argentina—by making external financing more expensive and triggering capital outflows from riskier assets.