The Macro Minute with Darius Dale Is fiscal policy still the key driver of the economy & asset markets?
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Jan 14, 2026 Discover why fiscal policy, not the Fed, is steering the economy in today's landscape. Dive into the effects of rising deficit spending and implications for Treasuries. Explore the fallout of the One Big Ugly Bill, which is driving a revenue collapse. Darius highlights the risks of AI leading to a jobless recovery and discusses how to prep for potential socio-economic shifts. His advice includes avoiding military conscription, boosting personal savings, and relocating from conflict-prone areas. It's a thought-provoking journey through economic insights!
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Fiscal Policy Still Dominates Markets
- Darius Dale argues fiscal policy remains the dominant driver of the post-COVID economy and asset markets.
- Many investors still overfocus on Fed policy while deficits and fiscal shifts matter more for asset dynamics.
Rapid Swing In The Federal Deficit
- The budget deficit narrowed from 6.8% (2024) to 5.4% (2025) then widened sharply in fiscal 2026.
- A 200bp fiscal-year widening to 7.7% signals a large positive fiscal impulse comparable to 2020.
Revenue Volatility Drives Deficit Moves
- Revenue surged in 2025 then is collapsing in fiscal 2026 driven by income and corporate tax declines.
- Customs duties growth and large swings in corporate taxes explain much of year-over-year revenue volatility.