Major stock markets on Wall Street closed mostly higher on Thursday following the remarks made by Treasury Secretary Janet Yellen, in which she revealed inflation will likely stay high over the upcoming months while the debt-to-DGP ratio will surpass 100% in the new budget plan. While Senate Republicans announced their $928 billion infrastructure counteroffer to President Joe Biden’s bill, the data noted pending home sales in the US monthly declined by 4.4% in April. Multiple companies were also set to report their earnings results following the closing bell, including Salesforce, Costco, Dell and HP. The Dow Jones soared 0.41% or 138 points at the close, with Boeing jumping 3.87%. The S&P 500 rose 0.12%, as Ford Motor and General Electric surged over 7%. On the other hand, the Nasdaq 100 lost 0.33%. Okta was the worst performer, plunging 9.79%.
Yellen: Debt-to-GDP ratio to rise above 100%
United States Treasury Secretary Janet Yellen shared on Thursday that the federal budget plan will be presented on Friday. She also mentioned that the debt-to-DGP ratio will be a little higher than 100%. Yellen stated that the real interest rate cost on the federal debt is currently negative due to current rates. Additionally, President Joe Biden’s budget assumes that overtime rates will revert to lower, but more normal levels. The Treasury official also underscored the importance of maintaining a responsible fiscal policy, in order not to impose tax increases on future generations. Yellen also predicted that due to an ageing population, there may be deficit problems arising after 2030.