The United States faces significant fiscal challenges as President Donald Trump implements a series of executive actions aimed at reshaping the country's economic landscape. Upon taking office, Trump initiated measures such as a hiring freeze for federal employees and a regulatory pause. However, experts warn that addressing the nation's burgeoning debt and bloated budget will be far more complex. The national debt has surpassed trillion, while the Congressional Budget Office (CBO) projects an escalating deficit, particularly due to rising spending on social programs like Social Security and Medicare. Scott Bessent, nominated as Treasury Secretary, has vowed to extend the 2017 Tax Cuts and Jobs Act to support American workers and manufacturers. Despite these efforts, inflation remains a concern, with mortgage rates climbing and commodities like oil and gold experiencing gains.

Upon assuming office, President Trump swiftly enacted several executive orders aimed at controlling government spending. One of his first moves was to impose a hiring freeze on federal employees and halt new regulations. This approach reflects his administration's commitment to reducing the size and scope of the federal government. However, financial analysts have pointed out that the real challenge lies in tackling the nation's staggering debt and oversized budget. EJ Antoni from The Heritage Foundation highlighted the difficulty of managing future spending commitments that have yet to materialize but are already earmarked for disbursement. These promises represent a significant portion of the budget and pose a formidable obstacle to fiscal stability.

The national debt stands at over trillion, according to the U.S. Treasury Department. This figure is expected to continue growing, driven by increasing expenditures on entitlement programs such as Social Security and Medicare. The CBO's latest report forecasts that the federal deficit will reach .9 trillion in the 2025 fiscal year. While there may be a brief decline in the deficit over the next couple of years due to expiring tax cuts, this trend is likely to reverse soon after. Scott Bessent, the nominee for Treasury Secretary, has expressed a strong desire to make the 2017 Tax Cuts and Jobs Act permanent. He believes that maintaining these cuts is crucial for supporting American industries and workers. During his confirmation hearing, Bessent emphasized the importance of implementing policies that reduce the tax burden on manufacturers, service workers, and seniors.

Inflation continues to present uncertainties in the economic outlook. The Federal Reserve conducted three interest rate cuts in 2024, including a 50-basis point reduction followed by two smaller adjustments. Despite these measures, the 10-year Treasury yield remains above 4%, impacting various borrowing metrics, including mortgage rates, which have recently exceeded 7%. Investors were somewhat relieved when the core consumer price index, excluding volatile food and energy prices, rose 3.2% in December, slightly below expectations. Market participants anticipate no changes at the Fed's upcoming meeting in late January. Meanwhile, commodity markets show mixed trends, with crude oil prices gaining and gold nearing its all-time high.

While President Trump's initial actions focus on immediate administrative reforms, the long-term fiscal health of the United States hinges on addressing the national debt and projected deficits. The incoming Treasury Secretary's commitment to extending tax cuts aims to stimulate economic growth and ease the tax burden on key sectors. However, navigating the complexities of inflation and global market dynamics will require strategic planning and adaptive policies to ensure sustainable economic progress.