Definition
What the government does with taxes and spending.
The story
If monetary policy is the Fed's lever, fiscal policy is Congress's and the President's: tax cuts, stimulus checks, infrastructure bills. When the government spends more than it takes in, it borrows the difference by selling Treasuries.
Why markets watch it
Big deficits mean more Treasury borrowing, which can push yields up.
Connects to
The Federal ReserveMonetary policyBudget deficitNational debt
Last seen in
We explain why it moves markets. What you do with it is your call. Commentary and education only. Not financial advice. All terms