US Fiscal Policy Monitor – 11.30.2019


Access the Powerpoint slides of this month’s ET Pro monitors here.

Access the PDF version of the ET Pro monitor slides here.

Access the underlying Excel data here.


  • No change since September: there is no Fiscal Policy, Deficit or Austerity narrative, at least as it concerns markets.
  • We are still observing a rebound in sentiment to normal levels, but we think this is related to generally more positive financial markets commentary during recent (better) equity market performance.
  • As with inflation, we believe that is because of narratives in political world. There, we do observe an emerging language about US debt levels, deficits and spending. It exists purely in political and wonkish debates, and has been almost completely untethered from financial markets discussion.
  • Like many other categories, we think there is a powerful complacency about this issue. Recalling some of Ben’s notes this year with tongue planted firmly in cheek, “We are all MMTers now.”

Narrative Map

Source: Quid, Epsilon Theory

Narrative Sentiment Map

Source: Quid, Epsilon Theory

Narrative Attention Map

Source: Quid, Epsilon Theory

Narrative Cohesion


Fiat News Index


Narrative Sentiment


Key Articles

‘I am a scavenger’: The desperate things teachers do to get the classroom supplies they need [Washington Post]

U-Va. doctors voice opposition to own hospital’s aggressive billing tactics [Washington Post]

Never Say Never to Forever Bonds [Financial Advisor]

Chicago Teachers End Strike, Their Longest in Decades [NY Times]

Two Risks to Stability Are Building Amid Short-Term Calm [Bloomberg]

US Fiscal Policy Monitor – 10.31.2019

Access the Powerpoint slides of this month’s ET Pro monitors here.

Access the PDF version of the ET Pro monitor slides here.

Access the underlying Excel data here.


  • No change in October: there is no Fiscal Policy, Deficit or Austerity narrative, at least as it concerns markets.
  • Sentiment on these topics has rebounded slightly, but it still remains deeply negative.
  • As with inflation, we believe that is because of narratives in political world. There, we do observe an emerging language about US debt levels, deficits and spending. It exists purely in political and wonkish debates, and has been almost completely untethered from financial markets discussion.
  • We have said that the monetary narrative in 2019 is that it means nothing in the real world and everything in the world of asset prices. Is common knowledge about deficits the opposite? Irrelevant to markets, but meaningful to the real economy?
  • Not yet. But as we argued in our September report, it does imply a complacency about the issue in markets.

Narrative Map

Source: Quid, Epsilon Theory

Narrative Attention Map

Source: Quid, Epsilon Theory

Narrative Cohesion


Fiat News Index


Narrative Sentiment


Key Articles

Federal Budget Deficit Swelled to Nearly $1 Trillion in 2019 [NY Times]

The Finance 202: Trump team drops push for key economic reform from Chinese [Washington Post]

Expect Bigger Deficits and Energy Unease Under a Trudeau Minority [Bloomberg]

Japan Raises Taxes on Its Spenders Despite Growth Worries [NY Times]

Are Congressional oil sales risking an oil price spike? [Houston Chronicle]

US Fiscal Policy Monitor – 9.30.2019

Access the Powerpoint slides of this month’s ET Pro monitors here.

Access the PDF version of the ET Pro monitor slides here.

Access the underlying Excel data here.


  • As we have noted in prior months, there is no Fiscal Policy, Deficit or Austerity narrative, at least as it concerns markets.
  • What we are seeing is a deepening of negative sentiment in these discussions.
  • Why? Because outside of markets, there HAS been an emerging language about US debt levels, deficits and spending. It exists purely in political and wonkish debates, and has been almost completely untethered from financial markets discussion.
  • We have said that the monetary narrative in 2019 is that it means nothing in the real world and everything in the world of asset prices. Is common knowledge about deficits the opposite? Irrelevant to markets, but meaningful to the real economy?
  • Not yet. But it does imply a complacency about the issue in markets.

Narrative Map

Source: Quid, Epsilon Theory

Narrative Attention Map

Source: Quid, Epsilon Theory

Narrative Cohesion


Fiat News Index


Narrative Sentiment


Key Articles

Don’t-pay-till-you-die reverse mortgages are booming in Canada [SF Gate]

Trump Says He’s Exploring “Various Tax Reductions” and the Economic Data He Loves Shows Why [NY Times]

The Finance 202: Mnuchin again demonstrates why he is Trump’s most loyal surrogate [Washington Post]

Companies Aren’t Putting Trump’s America First [Bloomberg]

Woke capitalism is a winner in the 2020 campaign [Reuters]

US Fiscal Policy Monitor – 8.31.2019

Access the Powerpoint slides of this month’s ET Pro monitors here.

Access the PDF version of the ET Pro monitor slides here.

Access the underlying Excel data here.


  • As we have noted in prior months, there is no Fiscal Policy, Deficit or Austerity narrative, except perhaps the narrative that these things “no longer matter’
  • As the primary season approaches, public discussions and coverage of financial markets-related policy proposals have become somewhat more acrimonious, driving a steady drop in sentiment and increase in negativity.
    • The attachment of political media to ‘Wall Street’ narratives, especially those suggested by on-narrative Bernie Sanders and Elizabeth Warren has been noteworthy.
    • News outlets are getting into related advocacy journalism as well – fiat news measures have risen to levels comparable to mid-terms.
  • Investors in regulation-sensitive asset classes and sectors should be mindful of a continued increase in volatility relating to this trend, which we expect to continue.

Narrative Map

Source: Quid, Epsilon Theory

Narrative Attention Map

Source: Quid, Epsilon Theory

Narrative Cohesion


Fiat News Index


Narrative Sentiment


Key Articles

Michigan is more important than ever in 2020 — here’s how Democrats think they can win the state back from Trump [CNBC]

Powell Admits Fed Has No Playbook for a Trump Trade War [Bloomberg]

Trump’s Rust-Belt Rally Risks Return of ‘Send Her Back’ Chants [Bloomberg]

Nobody Likes These Curves as Global Economy Bends Out of Shape [Bloomberg]

A $1 trillion US budget deficit is one big reason the Fed may have to cut rates [CNBC]

US Fiscal Policy Monitor – 7.31.2019

We received a couple comments from readers that they found the different presentations for the charts and for the raw signal data for Sentiment and Attention confusing. Thanks! And we agree. It’s confusing.

We’ve accordingly updated July monitors below so that (1) sentiment charts show the same rolling 3-month values we provide in the data spreadsheet rather than our spot calculations and (2) the attention charts show fixed historical values as per the data file, rather than a dynamically updated series to reflect the changing long-term average. No changes to the raw XLS data.

If you would still like to see the faster/dynamic presentations of the signal data, let us know. Otherwise, our plan will be to keep it as simple as possible.


Access the Powerpoint slides of this month’s ET Pro monitors here.

Access the PDF version of the ET Pro monitor slides here.

Access the underlying Excel data here.


  • There is no Fiscal Policy, Deficit or Austerity narrative, except perhaps the narrative that these things “no longer matter’
  • European financial media are actively writing with grief about the austerity programs put in place in Greece, for example.
  • The brief cohesion bump from the 2018 election and early primary platform discussions has since fallen to floor levels.
  • Likewise, the positive sentiment attached to stories about MMT, Green New deal and social safety net expansions has fallen away with the fading popularity of those articles.
  • We accordingly think that investment theses based on fiscal policy, budgets or government debt levels would need very powerful catalysts to be investable.

Narrative Map

Source: Quid, Epsilon Theory

Narrative Attention Map

Source: Quid, Epsilon Theory

Narrative Cohesion


Fiat News Index


Narrative Sentiment


Key Articles

The Hill’s Morning Report: Trump walks back from ‘send her back’ chants [The Hill]

The losing proposition of reparations [The Hill]

Mulvaney Says Trump Will Sign Budget Deal [Politico]

The Trumpification of the Federal Reserve [New York Times]

Trump adds $4.1 trillion to national debt. Here’s where the money went [AOL]

US Fiscal Policy Monitor – 6.30.2019

Access the Powerpoint slides of this month’s ET Pro monitors here.

Access the PDF version of the ET Pro monitor slides here.

Access the underlying Excel data here.

  • As in prior months, there is very little attention being paid to fiscal policy / budgetary topics, and practically no linguistic connection between them and financial markets narratives.
  • Cohesion and Fiat News, too, remain at floor levels.
  • We counsel some awareness of the scale of policy proposals, especially those being promoted by leading Democratic candidates. The market is paying zero attention with zero cohesion, which we observe as a complacent structure.
  • A sufficiently credible candidate with a GND/MMT-style approach could be a significant surprise to a market that could not care less about debt ceiling negotiations, government shutdowns, debt levels or budget deficits.

Narrative Map

Source: Quid, Epsilon Theory

Narrative Attention Map

Source: Quid, Epsilon Theory

Narrative Cohesion


Fiat News Index


Narrative Sentiment


Key Articles

Here’s why D.C.’s CFO is wrong on the budget [Washington Post]

A ‘mind boggling’ tax break was meant to help the poor. But trendy areas are winning too [CNN]

Inside Illinois lawmakers’ pork-barrel frenzy: Pickleball courts, dog parks and clout [Chicago Tribune]

Stop Sneering At de Blasio [New York Times]

Killing the ‘Cadillac tax’ would throw our health care even more out of whack [Washington Post]

US Fiscal Policy Monitor – 5.31.2019

Access the Powerpoint slides of this month’s ET Pro monitors here.

Access the PDF version of the ET Pro monitor slides here.

Access the underlying Excel data here.

  • There is very little attention being paid to fiscal policy / budgetary topics, and practically no linguistic connection between them and financial markets narratives.
  • We expect this to increase as election politics spin into higher gear, but for now, our Fiat News measure has fallen and Cohesion remains at floor levels.
  • As with other topics, China trade war language was closely attached to fiscal policy discussions in May as well.
  • Student debt continues to exert significant and disproportionate gravity on the language used to discuss US budget and fiscal policy, joined by entitlement programs and the continued backdrop of Green New Deal and MMT chatter.

Narrative Map

Source: Quid, Epsilon Theory

Narrative Attention Map

Source: Quid, Epsilon Theory

Narrative Cohesion


Fiat News Index


Narrative Sentiment


Key Articles

White House, congressional leaders push for two-year budget deal [Washington Post]

What Marco Rubio gets right – and wrong – about the decline of American investment [Washington Post]

Gov. Gavin Newsom faces a big political test as he shapes his first California budget [LA Times]

China’s ‘self-destructive nuclear option’ in trade war: Selling US Treasury bonds [CNBC]

Italy vs the EU? Markets spooked as Europe prepares for another budget showdown [CNBC]

US Fiscal Policy Monitor – 4.30.2019

Access the Powerpoint slides of this month’s ET Pro monitors here.

Access the PDF version of the ET Pro monitor slides here.

Access the underlying Excel data here.

  • Rising sentiment and cratering cohesion in US Fiscal Policy narratives appear to be the result of electoral politics – wide-ranging, optimistic plans in popular areas (e.g. student loan debt retirement, medicare-for-all, infrastructure)
  • There is, however, no central governing narrative, and financial market attention on fiscal policy narratives remains below historical levels. We don’t think it’s an overstatement to say that financial markets simply do not care about US fiscal policy at this time.
  • Of interest: as covered elsewhere on Epsilon Theory, language used in articles about student loan debt continues to be among the most well-connected in the US Fiscal Policy dataset.
  • While you may note a cluster of articles focused on the ‘US Federal Debt Crisis’ topic, we note that most refer to it as a non-existent crisis. It includes many pro-MMT style opinion and analysis pieces.

Narrative Map

Source: Quid, Epsilon Theory

Narrative Attention Map

Source: Quid, Epsilon Theory

Narrative Cohesion


Fiat News Index


Narrative Sentiment


Key Articles

How Populists Can Ruin a Global Recovery [Bloomberg]

The U.S. Government Debt Crisis [Seeking Alpha]

Andrew Yang, Marianne Williamson, Bernie Sanders are the 2020 candidates standing out to our readers [USA Today]

Hungry People and an ‘Abandoned’ Hospital: Puerto Rico Waits as Washington Bickers [NY Times]

Forget 16 years, the entitlement crisis is upon us now [The Hill]

US Fiscal Policy Monitor – 3.31.2019

Access the Powerpoint slides of this month’s ET Pro monitors here.

Access the PDF version of the ET Pro monitor slides here.

Access the underlying Excel data here.

  • It’s back to low cohesion of US fiscal policy narratives after an MMT-related hike, and as the campaign begins to spur divergent discussions.
  • We do think there IS a US Fiscal Policy narrative, although it is only modestly cohesive: “Debt doesn’t matter, so let’s do what we have to do to prevent [insert existential threat here].”
  • Issues that are moving closer to core fiscal policy and election narratives: Health care, health insurance spending, and student loans and indebtedness.
  • Issues that are moving further from the core narrative: Military spending and “The wall”, etc.
  • The core clusters are those where the gist is: “We aren’t spending enough”. Discussion of these new spending ideas in financial media is positive, driving a sharp increase in sentiment.

Narrative Map

Source: Quid, Epsilon Theory

Narrative Attention

Source: Quid, Epsilon Theory

Narrative Cohesion

Source: Quid, Epsilon Theory

Fiat News Index

Source: Quid, Epsilon Theory

Narrative Sentiment

Source: Quid, Epsilon Theory

Key Articles

Trump to Farmers: “LOVE YOU!” But I Still Want to Cut Your Subsidies

How Democrats can capitalize on Trump’s foreign policy malpractice

Trump’s Budget Asks for Nearly $300 Million to End the U.S. HIV Epidemic Within 10 Years

Debt-Ceiling Talks on Back Burner as Congress Blows Past Deadline

US Budget Deficit Hits Historically High Record In February

US Fiscal Policy Monitor – 2.28.2019

Access the Powerpoint slides of this month’s ET Pro monitors here.

Access the PDF version of the ET Pro monitor slides here.

Access the underlying Excel data here.

  • Cohesion of US Fiscal Policy topics remains somewhat elevated.
  • This appears to be the result of a sustained national discussion about the Green New Deal, Modern Monetary Theory, sustainable levels of debt and the impact on financial markets.
  • We do think there IS a US Fiscal Policy narrative: “Debt doesn’t matter, so let’s do what we have to do to prevent [insert existential threat here].”
  • We think it coexists with the growing inflationary zeitgeist only because they are being promoted by isolated missionary groups.
  • To that end, we note that the Fiscal Policy discussions are almost completely bereft of financial market linkages. US debt levels are simply NOT relevant to any active discussion of equity, credit or even rates, for the most part. For that reason, while there is an emerging narrative, we think markets are still complacent to it.

Narrative Map

Source: Quid, Epsilon Theory

Narrative Attention

Source: Quid, Epsilon Theory

Narrative Cohesion

Source: Quid, Epsilon Theory

Fiat News Index

Source: Quid, Epsilon Theory

Narrative Sentiment

Source: Quid, Epsilon Theory

Key Articles

Putting the ‘Trump tax cuts will pay for themselves’ myth to bed

Congress needs to unite and pass this key infrastructure legislation

Is Democrats’ swing left sound policy or an economic pipe dream?

New act can help us grapple with portion of exploding national debt

Why civics education matters

US Fiscal Policy Monitor – 1.31.2019

Access this month’s monitor slides in Powerpoint and in PDF.

Access the data in Excel.

  • Attention to fiscal policy narratives has dramatically increased in January.
  • The shutdown (and its prospective return) has created a huge range of shutdown-, border wall- and 2020 election-related budget topics, most of which are located on the right side of the narrative map.
  • These topics are almost completely untethered to market-related narratives. In other words, while attention to the shutdown, the wall, MMT, Medicaid and the like have risen, they aren’t at all similar to or related to stories being told about markets.
  • Right now, student loans and EM budgets are more connected to market narratives than shutdown-related topics.
  • We would be accordingly contrarian on any short-term market response to “shutdown” related news.

Narrative Map

Source: Quid, Epsilon Theory

Narrative Attention

Source: Quid, Epsilon Theory

Fiat News Index

Source: Quid, Epsilon Theory

Narrative Sentiment

Source: Quid, Epsilon Theory

Key Articles

Let’s step back from the wall and consider: Why does anybody even care?

As Next Budget Looms, Court Won’t Kick NRC Commissioner off Yucca Mountain Licensing

Why Republicans Fell in Love With Tax Cuts

The Death Logic behind Trumpism: Even nuclear winter would be worth it to own the libs

Interest Rates Reset For Slower Growth Track

Ban government shutdowns? Some Republicans and Democrats want to make it the law

US Fiscal Policy Monitor – 12.31.2018

Access this month’s monitor slides in Powerpoint and in PDF.

Access the monitor values in Excel.

  • Fiscal policy in the US remains a largely low-attention topic with little in the way of a cohesive narrative.
  • Our attention measure continues to fall following the mid-term election spike, but at a slower rate. This appears to be the result of an emerging emphasis on the recent government shutdown. This has created an internally cohesive set of articles and topics that are negative, but not closely linked to the main fiscal narratives.
  • We suspect that this is likely to keep our measure from falling too much further in the coming month; however, unless the shutdown becomes more connected to central fiscal policy issues, this is likely to be temporary.
  • We also note the falling rate of fiat news following the election, which further reinforces our belief that missionaries are less invested in promoting a strong central narrative around fiscal policy and markets.

Narrative Map

Source: Epsilon Theory, Quid

Narrative Attention

Source: Epsilon Theory, Quid

Fiat News Index

Source: Epsilon Theory, Quid

Narrative Sentiment

Source: Epsilon Theory, Quid

Key Articles

The Daily 202: Senate rebuke of Trump on Yemen shows Congress, not just the president, can offer moral leadership

George H.W. Bush Is Dead

Trump’s Economy: The Federal Budget Deficit Is On A Path To $1 Trillion

Uncle Sam Runs Record $205 Billion Deficit In November

‘Kids are falling off’: Why fewer children have health insurance now

Safeguarding America’s security

US Fiscal Policy Monitor – 11.30.2018

Access this month’s monitor slides in Powerpoint and in PDF.

Access the monitor values in Excel.

  • After the usual mid-term election narrative chatter, the importance placed on fiscal policy in the U.S. across media outlets continued to plummet in November. 
  • Along with the drop in attention to any one narrative, advocacy journalism and fiat news measures continued to decline. Our general interpretation is that the topics have generally returned to ‘policy wonk’ status. 
  • Sentiment on these topics has quickly returned to neutral levels, too as the wonks take back the baton from the more pointed advocates across news and ‘analysis’ journalism. 
  • We still see and hear investment theses built around the notion of major fiscal policy shifts in the US. Those things may come to pass, but until the narrative becomes more widely accepted and promoted, we don’t think that these theses have legs. 

Narrative Map

Source: Quid, Epsilon Theory

Narrative Attention

Source: Quid, Epsilon Theory

Fiat News Index

Source: Quid, Epsilon Theory

Narrative Sentiment

Key Articles

About the Coming Recession

Democrats Are So, So Bad at This

Why Richardson ISD’s longtime CFO has a ‘vote no’ sign in his yard against the district’s school tax increase election

Italy says not changing budget plans as euro partners fret

Fed Meeting on 7-8 November 2018: Impact of a Rate Rise

An Update on Quantitative Tightening: How Big of a Risk Is The Fed?

US Fiscal Policy Monitor – 10.31.2018

  • After climbing as usual (and, we think, in more muted fashion) in connection with mid-term elections, attention to US Fiscal Policy narratives ticked down modestly in October.
  • We are not observing higher than usual fiat news or advocacy journalism effects, although we note that the aggregate level of fiat news for fiscal policy topics is very often much – between double and triple – that of similar topics we track. 
  • The tone and sentiment of topics has continued to plummet in the lead-up to elections, which we anecdotally attribute to coverage of political rhetoric, attack advertisements and the like. We expect this to recover following elections, but would be focused on potential import if sentiment remained as negative as it is today. 
  • While attention is high for the elections – stories are reporting many of the same themes – if anything, the narratives around US Fiscal Policy appear to be anti-austerity rather than anti-deficit. The most central topics are not market debt fears or spending levels, but rather inequality and funding of education, health care and disaster services at the federal level. 

Narrative Map

Source: Quid, Epsilon Theory

Narrative Attention

Source: Quid, Epsilon Theory

Fiat News Index

Source: Quid, Epsilon Theory

Sentiment Index

Source: Quid, Epsilon Theory

Key Articles

Lower For Longer Is No Longer Certain

The Credit Cycle is On the Turn

The Credit Crunch Cometh

Are Republicans seeking to get rid of Medicare, Medicaid and Social Security?

No, Trump’s Tax Cut Isn’t Paying for Itself (as Least Not Yet); News Analysis

The U.S. Economy is Booming. So Why Is The Federal Deficit as its Highest Level Since 2012?