$16.$ Impact of Government Spending Jayhawk

Forecasting Services analyzed several factors that could

affect interest rates in the future. Most factors were

expected to place downward pressure on interest rates.

Jayhawk also expected that, although the annual budget

deficit was to be cut by $40$ percent from the previous

year, it would still be very large. Thus, Jayhawk believed

that the deficits impact would more than offset the

effects of other factors, so it forecast interest rates to

increase by $2$ percentage points. Comment on Jay$-$

hawks logic.